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The Danish Tax Agency (DTA) recently sent out letters to small and medium enterprise (SMEs), with the aim to check intra-EU purchases.
The letters require taxpayers to check their prior reporting in terms of, e.g., amounts, VAT period, goods and services status, EU and on-EU supplier status, and the amounts reported, and rectify the amounts.
If the amounts are correct, we recommend confirming this to the DTA and reaching out to suppliers about mismatches. If the amounts are incorrect, they should be rectified. For taxpayers with no or limited VAT recovery, the same VAT is a partial or full cost. Therefore, any such underreported purchases (or even reported with delay, in a VAT return subsequent to the right one) might trigger not only additional payable VAT, but also late payment interest (even if subsequently subject to voluntary disclosure). The normal three-year statute of limitations can be extended to 10 years in case of gross negligence.
For now, the letters cover only SMEs and 2022. For reporting periods prior to 2022, we recommend reviewing the amounts already reported and performing voluntary corrections. For future reporting periods, we recommend reviewing the amounts to be reported when the filing system automatically flags such differences. Also, we recommend that these alerts should be saved.
Contact:
- Mick Jørgensen, Partner, Indirect Tax (Tax) tlf. +4551221643
- Alex Antonescu Clita, Senior Manager, Indirect Tax (Tax) tlf. +4525294053
- Deniz Asil, Senior Consultant, Indirect Tax (Tax) tlf. +4525293121
Summary
Businesses should start in-depth monitoring their intra-EU trade, due to intensified tax audits.