No Full VAT Deduction for Management Services to Group Parent in Another EU Country, Payroll Tax Applies

• A Danish subsidiary provided management and accounting services to group companies and its parent company in another EU country.
• The Danish Tax Council ruled the subsidiary did not have full VAT deduction rights for purchases used for its taxable supplies and financial services to the parent company.
• The services were not taxable in Denmark due to their place of supply, but would not grant VAT deduction if supplied in Denmark, as they are VAT-exempt fund management services.
• The Tax Council declined to rule on whether certain services qualified as VAT-exempt portfolio management for investment funds.
• The subsidiary’s VAT-exempt financial activities billed to the Swedish head office may still be subject to payroll tax (lønsumsafgift) in Denmark.

Source: info.skat.dk

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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