Denmark acts on foreign e-commerce VAT evasion

Wed 27th May 2015

The Danish Tax Minister has declared that more resources are to be devoted towards detecting and penalising foreign online sellers of goods to consumers who have not properly accounted for local VAT.

The Danish Tax office is keen to protect its domestic online retailers from foreign sellers evading local tax, especially as Danish VAT is close to the highest in the European Union – only Hungary’s 27% VAT is higher.

Measure to be put in place in 2016 will include extra tax inspectors and the right for the Danish tax office to review consumers’ online purchases and VAT treatment.

Cross-border EU VAT e-commerce rules

Currently, non-Danish EU e-retailers have to register and charge Danish VAT at 25% once the start to sell over DKK 280,000 per annum – approximately €35,000 based on the EU distance selling VAT thresholds. Non-EU sellers have to register from the first sale if they are importing directly to the consumer.  Although a number of these e-tailers just suffer the Danish import VAT and do not declare the sales for VAT.

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