Municipalities Denied Electricity Tax Reimbursement for Street Lighting Due to Lack of VAT Deduction Rights

A number of municipalities were not entitled to a refund of the electricity tax used for street lighting under the former Electricity Tax Act § 11, subsection 15, as they did not have the right to deduct VAT on the expenses for the electricity used, according to the VAT Act §§ 37 and 38. The Eastern High Court found that there was no necessary direct and immediate connection between the plaintiffs’ expenses for electricity used for street lighting and the taxable activities of the municipalities, and therefore the conditions for VAT deduction were not met.

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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