Danish Court Clarifies VAT and Tax Treatment of Interest Income from Intra-Group Loans

• The National Tax Court clarified VAT treatment of interest income from loans by a company to its subsidiaries.
• Interest income was deemed passive capital investment and an ancillary transaction for VAT purposes.
• Interest income should not be included in calculating the VAT deduction percentage for shared costs, nor should it reduce input VAT deductions or electricity tax refunds.
• The taxpayer remains subject to payroll tax under Danish law.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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