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On 30 November 2025, the Danish Tax Agency issued updated guidance on VAT refunds, introducing significant changes to how suppliers and customers correct incorrectly charged VAT. The revised framework is designed to reduce administrative burdens while ensuring that refunds remain fair and free from duplication.
The clarification is particularly relevant for businesses involved in complex supply chains, cross-border transactions and disputes over VAT treatment, as it provides new options for recovering VAT while tightening safeguards against double refunds.
Correcting VAT without immediate repayment
Under the updated guidance, suppliers may issue credit notes or corrected invoices to adjust VAT without first reimbursing the customer. This approach simplifies the correction process and avoids unnecessary cash-flow disruptions between commercial parties.
At the same time, refunds remain conditional on the VAT having been properly remitted to the Danish Tax Agency, ensuring that corrections do not result in unjustified claims on public funds.
Customer’s right to claim directly from the DTA
A notable development is the explicit recognition of a customer’s right to apply directly to the Danish Tax Agency for a VAT refund where recovery from the supplier is difficult or impossible. This option is available only if the supplier has already paid the VAT to the tax authority.
Such situations may arise in cases of supplier insolvency, business closure or disputes where the supplier refuses to issue a credit note due to limitation periods.
Safeguards against double refunds
To protect the integrity of the VAT system, the guidance clearly prohibits direct customer claims where the supplier has already been reimbursed by the tax authority or has already refunded the VAT to the customer. These restrictions are intended to ensure that the same VAT amount is not refunded twice.
The Danish Tax Agency has emphasised that each refund pathway is mutually exclusive and subject to verification.
Special situations and registration errors
The guidance also addresses cases in which employees were incorrectly registered as taxable persons for VAT purposes. Such cases will be assessed individually, taking into account the specific facts and employment arrangements involved.
This clarification acknowledges the practical complexity of VAT compliance, particularly for businesses with mobile workforces or atypical contractual structures.
Practical impact for businesses
For suppliers, the updated rules provide greater flexibility when correcting VAT errors and reduce the likelihood of disputes with customers. However, they also increase the importance of accurate documentation and compliance monitoring.
For customers, the ability to claim VAT directly from the tax authority offers a valuable safeguard in difficult situations, albeit subject to strict evidentiary requirements and limitations.
As reported by International Investment experts, Denmark’s updated VAT refund guidance reflects a broader European move toward more responsive and pragmatic VAT administration. While the new rules offer businesses greater flexibility in resolving VAT issues, they also underscore the need for robust compliance systems to manage risks and prevent duplication.