Better opportunities of refund of energy taxes in Denmark

30 January 2014

The Danish tax authorities have changed their practice and now approve more often than earlier refund of taxes on energy used for air condition systems.

Danish businesses may obtain refund of the full tax on energy used for process purposes, but only for a share of the energy tax used for comfort cooling. This is cooling out of regard to the comfort of employees or customers. The businesses within the liberal professions – which cannot otherwise obtain refund – can now obtain refund for comfort cooling. 

Many businesses have cooling in rooms where there are several activities. This raises the question whether or not it is comfort cooling.

After having lost a couple of cases at the National Tax Tribunal, the Danish tax authorities have now issued new guidelines. It is stated in the guidelines that focus should in such cases be not only on whether persons stay in the relevant rooms but also the purpose of the cooling.

BDO’s opinion

It should in our opinion be possible to file a subsequent report – to obtain refund with retrospective effect – based on the new guidelines. The difference between the refundable tax on energy for process purposes respectively comfort cooling is in 2014 DKK 0.409 per kWh. For many businesses the amounts will be significant.

You are welcome to contact us if you require an assessment of the possibility of subsequent reporting and the relevant financial advantages. 

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge.