The cost sharing exemption in the Danish VAT Act (Momsloven) has been restricted to companies of ”common interest” in pursuance of the directive on the common system of value added tax (Momssystemdirektivet). Hence, the financial sector has been debarted from using this exemption, which they applied in good faith, cf. C-8/01, Taksatorringen. In the light of this paradigm shift, this dissertation will look at the EU-law and –practice and appraise whether danish-law is in conformity. The specific provision figures in the directive on the common system of value added tax, article 132, subsection 1, letter f and makes it possible for companies of ”common interest” to form a group and share the VAT. These companies are mentioned exhaustively in chapter 2. In 2006 the Commission introduced an amendment to an Act, as the current legislation did not seem to fit the purpose of the financial and insurance business models, which have evolved over the years. The amendment ended with nothing, and no further attemps have been made to review the rule. The rule did not receive any attention until The European Court of Justice’s ruling in C-326/15, DNB Banka, C-605/15, Aviva, and C616/15, The Commission against Germany. In the light of this, the danish practice in the domain needs to be revalutaed. The VAT exemptions for the financial sector are a result of the difficulties with the calculation of the VAT, but this dissertation has proved a solution proposal for this purpose. In section 5.5 the TCA-method is pointed out as a method that settles with the indirect substraction method and in addition to that a way to calculate the VAT-basis. An implementation of this economic method however results in certain transaction cost but also makes it possible for the companies to choose the solution proposal option to tax. An inevitable principle in the VAT- and EU-system, and for this dissertation, is the neutrality principle which purpose is to ensure the VAT is neutral in relation to the consumer’s choice of services and for the companies choice of organization structure. In addition to that ensures against the ”hidden VAT”, which the consumers typically pays, ultimately. Det financial sector faces a new problem on whether to insource the activities, which now is imposed with VAT, or continue the outsourcing to a third party. In this context, the authors has accentuated two solution proposals to supply this problem. One the one hand option to tax is a solution and is equal full deductibility, with wich the symmetry in the VAT system is guaranteed – that is when the VAT-duty is corresponded to the deductibility. On the other hand joint registration is a solution in which internal transactions are exempted for VAT, but this solution proposal is conditioned by group connection. Hence, small and middlesized companies must squint at the option to tax solution. The danish legislator has taken a position to the change in the practice and introduced a bill re the change of Momslovens § 13, subsection 1, pr. 19, thus it is litteraly only companies of ”common interest”, who can make use of the exemption. The law will so far come into force on June 1 2018. It will be interesting to follow the future within this area, and this is also where the authors also found the inspiration to this dissertation.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||91|