Changed VAT Practice For Paved Parking And Road Areas

The new practice of the Danish Tax Agency and the National Tax Court has changed the VAT treatment of real estate sales in Denmark. This article provides an overview of the latest changes, especially regarding parking areas, which are considered a separate property.

New practices and VAT recovery

The Danish Tax Agency has changed its practice in light of decisions from the National Tax Tribunal. This change includes a revision of which properties are considered building land for VAT purposes. Previously, certain properties, such as those with garages, outbuildings, or road construction, were considered building sites if they did not fulfill the purpose of the local plan. The new practice, effective from January 2019, now allows recovery of VAT paid in accordance with the previous practice.