I have chosen to write about VAT on delivery of building lots and new properties in Denmark, which came to effect on 1. January 2011, and was tighten buy law number 520 of 12. June 2009. Delivery of new property and building lots has until 1. January 2011, been exempted from VAT according to Danish VAT law. § 13 subsection 1 number 9. This exemption has now been tightened so non taxable persons is the only one there are excepted. This is not completely true because non taxable persons, also may have to pay VAT on delivery of building sites and new properties. It depends on the amount of transactions a person have of this kind, and if the delivery is made for sale. Through the paper I have focused on the tightened VAT law for taxable persons. There are some headlines within the new law: New or old building, if the building of the property has begun before 1. January 2011, the delivery of this will not be taxable. But if the building of a property first starts in 2011, the delivery will be taxable. It is important to mention that it is not the entire building there has to be completed before 1. January 2011. the construction of foundation in 2010 is enough, to make the delivery free of VAT, even if the delivery is in 2011 or later. Another headline is when, more than one property is being build. According to Danish VAT law it is "one building" when the property is placed on the same foundation. Therefore if only a little part of the foundation is placed before 2011, all of the houses can be sold without paying VAT. Contrast if the houses are finished on several individuel foundations, it is only them, that are begun in 2010 there are free of VAT, the rest will not be free of VAT . A taxable person that delivers a building lot, will have to pay VAT after 2010. Also a delivery of a lot with a garage or a similar building, will within the VAT law be a delivery of a building lot. This is because a garage is not a properly housing. I have made some calculation for a company, there has been hit economic by the tightened law. The company Tanderup Byg ApS has bought a lot in 2010, and had planned to build 3 houses on the lot and sell them. The construction of the houses did not start as planned in 2010 because of complaints from the neighbors to the lot. Therefore the company will have to pay VAT of the delivery of the houses. The calculation are made with the same assumptions. Tanderup Byg ApS will have a worse liquidity in the calculation of Dkr. 465.000 due to the tightened law.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||43|