Denmark: VAT not applicable to video game skin resales by private individual
On June 2, the Danish Customs and Tax Administration published National Tax Court Decision No. SKM2025.297.LSR, clarifying the conditions under which private individuals are considered to be carrying out economic activity for VAT purposes.
The case involved a private individual who regularly bought and resold skins (digital items) for a video game, generating minimal profit. The Danish Tax Agency initially assessed VAT on the sales, concluding that the volume and regularity of the transactions constituted economic activity under the VAT Act.
Upon review, the National Tax Court reversed the decision, stating:
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The acquisition of the skins was for personal use within the game, and therefore did not constitute economic activity under VAT rules.
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There was no sufficient indication of a profit motive, as the skins were resold to other private users at roughly the same price and in the same condition as originally purchased.
This decision reinforces the principle that occasional or hobbyist trading without clear intent to generate profit does not qualify as taxable economic activity under Danish VAT law.
