Policy for IP Lessor
This is the VAT and Tax Deduction policy for IP Lessor of OC Network in EEA; SPV: Muellners ApS.
Policy for Purchase Journal:
When the I.P. Lessor of Muellners Foundation in Denmark engages in the following market activities, then;
Guest House Rent, Utilities, Waste and sanitation, Water, Electricity, Internet, and Phone bills are all deductible costs; if VAT is charged on these invoices, the VAT amounts are 100% deductible.
Any representation expenses(Hotel stay) are 100% deductible, and any associated travel arrangements, such as flights and restaurants(both in DK and outside), are 25% deductible, and if VAT is charged, accordingly, i.e. 100% VAT on hotels and 25% of the VAT on the entertainment expenses.
Any digital service purchased from outside DK must undergo reverse charge obligation. This VAT is payable and is also deductible since these purchases are directly used in SPV operations.
Any goods purchased from outside DK must undergo reverse charge obligation. This VAT must be paid but is also deductible since it is used in company ops.
Meals ordered back to the Company Guest House for Board meetings are 100% deductible.
Guidelines by SKAT:
rent (if VAT has been added to the invoice)
purchase of and expenses for repair and maintenance of operating equipment, e.g. machinery, tools, fittings and furniture in factory, shop or office, fishing vessels
workwear and uniforms belonging to the business and which the staff wear at work
mobile phones if the phone can be regarded as operating equipment in relation to the business’s sale of goods and services subject to VAT
magazines, trade journals, technical literature, staff and customer magazines, including periodicals. Weekly magazines and periodicals provided by the business as part of its customer service
flowers for decorating restaurants and hair salons, among other things
heating, electricity, gas and water for the business
advertising items and printed advertising material
cleaning
safety equipment
telephone (landline)
office supplies
accounting services
Businesses registered for VAT may deduct 100% of the VAT on hotel expenses and 25% of the VAT on restaurant expenses.
100% VAT on meals (for example, coffee and cake or lunch) in connection with meetings if the meetings are strictly business-related.
This may, for example, be in connection with:
meetings with business associates
board meetings
in-house meetings with professional content, including theme days
in-house course activities
Specific, unannounced overtime
As a general rule, you are not entitled to VAT deductions for expenses relating to staff meals, etc. However, you may deduct VAT in case of specific, unannounced overtime.
Specific and unannounced means that the work may not be planned in advance, nor may it be customary for the employee to work overtime. For example, no deduction will be granted for farm workers’ overtime during the harvesting season as this is regarded as regular overtime. Therefore, A deduction will only be granted for overtime, announced immediately before the end of the regular working hours.
Social events
Expenses incurred by the business in connection with social staff events are not deductible. This applies, for example, to Christmas parties, staff parties, anniversary events and similar events.
Services exclusive of Danish VAT
do not have to calculate and pay Danish VAT if you purchase the following services abroad:
services related to property not located in Denmark, including hotel stays in other EU countries
passenger transport
tickets to cultural, arts, sports, scientific, training and entertainment events, and so on.
services provided by restaurants or catering businesses
short-term hiring of means of transport
do not have to pay Danish VAT if you purchase the following services abroad and primarily use the service outside the EU:
sale of rights
advertising
consultancy services
negative obligation (non-competition clauses, etc.)
banking, financing and insurance activities, except for hiring of safe-deposit boxes
hiring of labour
hiring of movable tangible property
transport and transmission of gas, electricity, heat and cold
Partial deduction if the purchases also concern VAT-exempt business activities
If you have both revenue that is subject to VAT and revenue that is exempt from VAT, you must distribute the VAT on the expenses which concern both revenue subject to VAT and revenue exempt from VAT (partial deduction). These may be expenses relating to rent, lighting, water, heating or accounting services.
Policy for Royalty Journal
(categorized as EU sales/non-EU sales/local sales in Denmark or Gains on I.P. assets)
In the case of SPV: Muellners APS, the VAT on the expenses and expenses generally concern the consolidation of I.P. assets, and leasing them locally is a VAT liable activity. ApS does not provide VAT exempt services. APS may provide 0% VAT services
VAT exempt : None
the 25% VAT activities : Locally and in EU to private individuals, non VAT registered businesses through OSS mechanism.
0% VAT activities: Services which are used or consumed by companies outside the EU.
References:
References:
Legal Guidance: https://info.skat.dk/data.aspx?oid=1947953
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