VAT exemption for municipality’s sale of building plot – Landsskatteretten ruling

• The case involved whether a municipality could sell a property without VAT.
• The National Tax Tribunal found that the municipality conducted independent economic activity through the sale of real estate and would act in this capacity in the sale of the property in question.
• The Tribunal determined that the property should be classified as a building plot, as it was in a cleared state at the time of transfer, had been independently demarcated, and could be developed with housing in accordance with the local plan.
• The fact that the municipality continued the VAT-exempt activity of leasing the property from expropriation until the termination of the lease agreement did not exempt the sale of the property from VAT under section 13(2) of the VAT Act.
• The municipality expropriated the property for urban development and sale, and the property had not solely been used in connection with VAT-exempt activity as required by section 13(2) of the VAT Act.
• The acquisition or use of the property by the municipality had not been exempted from the right to deduction under chapter 9 of the VAT Act.
• The National Tax Tribunal therefore upheld the Danish Tax Agency’s response to the municipality’s question 1.

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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