Refund of Danish VAT to foreign businesses domiciled outside the EU

Businesses domiciled in countries outside the EU can obtain refund of VAT on goods and services purchased in Denmark. Danish VAT is 25%. Within the retail trade, VAT is included in the total purchase price and therefore it amounts to 20% hereof.

Foreign businesses need to apply for a refund of VAT. The amount is not refunded automatically.

How VAT is refunded by SKAT

When applying for a VAT refund, you need to complete and submit application form no. 31.004 (Refund of VAT to enterprises outside the EU), possibly with continuation page. You should use the continuation sheet if you apply for a VAT refund concerning more than eight invoices.

Form no. 31.004   (Refund of VAT to businesses outside the EU)

You can choose to complete the form in Danish, German, English or Swedish and you can write your information in capital letters or you may complete the form electronically. You then submit the form to:  

SKAT Tønder
Udland - Momsrefusion & Momsregistrering
Pionér Alle 1
6270 Tønder
Denmark

Note that the deadline for submitting the form is 30 September of the year following the year in which you purchased the goods or services. This means that you should submit the form no later than 30 September 2015 if you wish to apply for a refund of VAT on goods and services bought during 2014.

You will receive a decision on your application within eight months of receipt of your application.

You can choose to have the amount refunded in Denmark or in the country in which the business is domiciled. If you choose to have the amount refunded in your country of domicile, your business must bear any costs in connection with the payment of the refund.

What to include in the application 

The application should include:

The duration of the application period 

Your application must cover the purchased goods and services subject to VAT concerning a period of at least three months and no more than an entire calendar year. The period may, however, be shorter than three months when it concerns the rest of a calendar year in which an application for VAT refund has already been filed. Such an application may also cover purchases which have not been included in previous applications for the calendar year in question. It is, however, not possible to apply for refunds for past years.

Minimum amounts

It is only possible to obtain a VAT refund if the application concerns a VAT amount of at least DKK 3,000. If the application concerns a calendar year or the rest of a calendar year, the amount must total at least DKK 400. The amounts in the application must be stated in Danish kroner.

Documentation

You must enclose the original invoices together with the application. If you have paid import VAT, the original receipt for the payment hereof must also be submitted.

The invoices must contain the following information:

  • date of issue
  • invoice number
  • supplier's name and address and CVR/SE no. (central business reg. no./VAT no.)
  • name and address of the purchaser
  • description of the nature of the goods or services
  • amount and price of the goods
  • VAT amount

Sales tickets or bills not exceeding DKK 3,000 issued by retail merchants or other businesses from which sales take place primarily to private consumers may, however, be used as documentation even though the invoices do not include name and address of your business.

Where the application concerns the refund of VAT on petrol, diesel oil, etc. purchased at petrol stations, the bill/receipt may - instead of the name and address of your business - state the vehicle's registration number.

Where the documentation consists of a bank statement from petrol and oil companies concerning sale on credit of petrol, diesel oil, etc., you must also submit the receipts issued in connection with the individual purchases.

Certificate

If you have not previously applied for a VAT refund in Denmark, you must submit documentation to the effect that you run a commercial business in your country of domicile.

Therefore you must submit a certificate which proves that you run a commercial business in the country in question. The certificate must be issued by the competent authority in the country of domicile.

The certificate is valid for up to one year. If the certificate was issued more than one year ago, you need to submit a new certificate.

How to fill in the application

You must complete all the items with sufficient and correct information.
Insufficient information may cause that SKAT rejects the application.

Information on invoices

On page two of the application form you must state the following: 

  • the numbers of the individual invoices on the specification, consequtively numbered. Number one is allocated to the first invoice, number two to the second invoice etc.
  • the nature of the goods or services - for example overnight stays at hotels  
  • date of invoice or customs receipt
  • invoice or customs receipt number
  • the VAT amount you wish to have refunded.
  • for which purpose are the goods or services used, or expected to be used, for example international transport of goods or participation in trade fair 
  • name and address of the business having sold the goods or services to your business.

  

Incorrect information

You may be fined if you present incorrect or misleading information or withhold information relevant for the treatment of the application.

Where VAT is refunded to you unlawfully, the amount will be collected in accordance with the applicable Danish provisions. The amount will be collected in accordance with the agreements on mutual VAT collection assistance concluded with the country in which your business is domiciled. This also applies to any fines.

Fines and unlawfully refunded VAT may also be set off by SKAT against subsequent claims for refund of VAT.

Power of attorney

You may authorize a third party to handle the work in connection with applying for a refund of VAT. This does not change the general conditions. It is a precondition, however, that you submit a power of attorney, which shall subsequently apply until you withdraw it.

The same applies if SKAT is to pay the amount of refund to someone other than the applicant. It must be stated clearly who is eligible to receive the amount.

Who is entitled to VAT refunds?

A business can, on certain conditions, obtain refund of Danish VAT paid in Denmark, when the business is domiciled in a country outside the EU. The refund includes goods and services for the commercial use of the business.

The business can obtain VAT refunds if the following four conditions are met:

  1. The business is not domiciled or has a place of business or the like in Denmark
  2. The goods or services are bought for commercial use
  3. The business would be subject to a registration tax in accordance with the Danish VAT Act (Momsloven) if the business was situated in Denmark
  4. During the period which the application concerns, the applicant has not conducted business which is subject to registration tax except for:

Scope of refund

VAT on goods and services can be refunded to the same extent as Danish businesses can deduct VAT payable on purchases of a similar nature. This means that you can obtain a full refund on most of your purchases for commercial use. 25% of the full VAT on restaurant visits is refundable and 100% of the VAT on overnight stays at hotels is refundable.

You are entitled to deduct VAT in connection with lease of cars. You can obtain refund of VAT if the lease term exceeds six consecutive months. It is a condition that at least 10% of the vehicle usage is commercial.

The refund is limited to a special deduction which must be stated on the invoice.

On a number of purchases, VAT is never refunded by SKAT. This applies to purchases concerning:

When you as a foreign business purchase goods/services in Denmark with Danish VAT, a VAT refund is not obtainable when the goods/services could be exempt of VAT in accordance with the Danish VAT Act.

Contact SKAT for more information about this.

The Oresund Bridge

In connection with trips across the Oresund Bridge, foreign businesses may apply for a refund of VAT on the bridge toll from the Swedish tax authorities.

Businessees from Albania, Bosnia and Hercegovina, the Faroe Islands, Greenland, Iceland, Macedonia, Montenegro, Serbia and Turkey should contact:

Skatteverket
Utlandsenheten
205-31 Malmø
Sweden
E-mail: skattekontor1@malmo.se

Businesses from other countries are to contact:

Skatteverket
Utlandsenheten
106 61 Stockholm
Sweden
E-mail: stockholm@skatteverket.se

Refund of VAT on the bridge toll can therefore not be obtained from SKAT.