Reverse Charge & “Call Off Stock” in Denmark
The Danish VAT Act introduced the reverse charge mechanism on 1 July 2014, which is applicable to certain domestic sales of game machines, laptops, tablets, and computer chips.
This mechanism enables the transfer of the supplier’s tax liability to the recipient of the supply. It becomes the responsibility of the recipient to calculate and pay the VAT due.
Read more about reverse charge, stock consignment and “Call-off stock in Denmark” in our comprehensive guide.
As mentioned above, starting from 1 July 2014, the Danish VAT Act implemented the reverse charge mechanism for specific local sales, including game machines, laptops, tablets, and computer chips. This system shifts the tax obligation from the supplier to the buyer, who must then determine and remit the owed VAT.
Companies engaged in VAT-exempt sales in Denmark using the EU reverse charge rules should ensure that the invoice clearly indicates this. A simple statement such as “reverse charge” on the invoice would suffice.
It’s important to note that the reverse charge mechanism does not apply to most major supplies of goods, except for goods that involve installation or fall under specific categories.
Selling in Denmark?
Denmark – Consignment & “Call off stock”
Numerous member states of the European Union (EU) have implemented simplified call-off stock requirements. These requirements were introduced through Article 17a of the EU VAT Directive and have been incorporated into Danish legislation under Section 10a of the VAT Act, along with corresponding amendments.
A “call-off stock” scenario arises when goods owned by a non-resident supplier are dispatched and stored in the customer’s country, typically at the customer’s own facilities. The customer only takes legal ownership of the goods from the foreign supplier when they are actually withdrawn from the stock.
On the other hand, consignment stock generally refers to inventory that is sent by a transferor (also known as the “consignor”) to a warehouse, with the intention of being sold to the final customer by an intermediary referred to as the “consignee.” In contrast, call-off stock refers to goods transferred by a supplier to a warehouse or storage facility where a pre-identified customer has the freedom to take them as needed. It is common for the warehouse to be owned or controlled by the customer.
If the goods are transferred into Denmark from outside the EU, these transactions are treated as imports by the consignor, assuming the consignor is the importer. If transfers are made into Denmark from other EU Member States, they are generally treated as intra-Community acquisitions by the consignor of its own goods, followed by domestic supplies to the consignees. In either case, a registration requirement is triggered.
Import VAT
If a business engages in sales to Denmark, it is obligated to register as a VAT taxpayer. When goods from another EU Member State arrive in Denmark, it is termed an “intra-Community acquisition” rather than an import. However, in cases where the importer is not registered for VAT, the Danish recipient of the goods is responsible for paying the import VAT, as well as any applicable customs excise duties, upon receiving the goods.
Import VAT generally becomes chargeable on the customs clearance date or the date on which the goods leave a duty suspension regime, as applicable. If imported goods are themselves used to make other taxable supplies of goods or services, the usual rules governing the recovery of input tax apply to the Danish recipient of the goods.
On or after July 1, 2021, certain low-value goods imported under the “Import One Stop Shop” (IOSS) scheme are taxed under that regime instead of being subject to import VAT.
Last Updated: 27/12/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
