Are you aware of the new rules regarding distance selling of goods liable to excise duties?

The rules for distance sales are expected to be amended in a number of excise duties laws on 1 February 2022 as a response to the new One-Stop-Shop system regarding VAT, which became effective on 1 July 2021.

The One-Stop-Shop system

The new One-Stop-Shop system has implemented a mutual limit for distance sales for VAT of EUR 10,000 for companies in the EU and the possibility for a company to be registered in the One-Stop-Shop system (OSS) in the country in which the company is established. The country in question will then allocate the VAT between the relevant member states.
This means that companies registered in the OSS system can choose to pay local VAT on distance sales of goods to private consumers in other EU countries and thus, omit to register for VAT in those countries.

Impact of the OSS on national excise duties

Prior to the OSS becoming effective on 1 July 2021, companies in other EU countries which sold goods liable to excise duties to Denmark through distance selling had to register for VAT and the excise duties in question in Denmark, and were obliged to file excise duties to the Danish Tax Agency.

After the new OSS became effective, a vacuum occurred in the correlation between the OSS and the rules for distance selling in a number of excise duties laws, as companies in other EU countries could only register for and file excise duties to the Danish Tax Agency, if they were registered for VAT in Denmark.

This has resulted in an unintentional consequence which now makes the private consumer who purchases goods liable to excise duties via distance sellling obliged to file the excise duties to the Danish Tax Agency from 1 July 2021.

New rules from 1 February 2022

As a result of the above consequence, an amendment of the distance sales rules in several excise duties laws has been passed and are effective from 1 February 2022.

The amendments imply that registration for distance sales of goods liable to excise duties to consumers in Denmark is no longer conditioned by the company being registered for VAT in Denmark. Instead, the requirement is that the company must pay VAT to Denmark.

This means that companies in other EU countries which sells goods liable to excise duties to private consumers in Denmark need to be registered for the relevant excise duty in Denmark, if the distance sales from other EU countries exceed EUR 10,000 per year. This applies irrespective of the company being registered in OSS or not.

Further, companies whose distance sales does not exceed EUR 10,000 per year do not have to pay VAT in Denmark and thus, these companies do not need to register for nor file the excise duties in question to the Danish Tax Agency. Instead, the excise duties must be filed and settled by the private consumer.

Example

A company in Germany selling chocolate goods liable to excise duties to private consumers in Denmark which is registered in OSS in Germany (and thus not registered for VAT in Denmark), should only register for and file excise duties on chocolate to the Danish Tax Agency, if the company’s distance sales to other EU countries exceed EUR 10,000 per year.

If the distance sales do not exceed EUR 10,000 per year, it is the Danish consumer who must pay the excise duties on chocolate to the Danish Tax Agency.

Which products do the rules apply to?

The new rules apply to excise goods comprised by the following Danish acts:

• The Danish Battery Tax Act
• The Danish Pesticides Tax Act
• The Danish CFC Tax Act
• The Danish Chocolate and Sugar Tax Act
• The Danish Packaging Tax Act
• The Danish Consumption Tax Act
• The Danish Ice Cream Tax Act
• The Danish Nitrogen Tax Act
• The Danish Solvent Tax Act
• The Danish PVC and Phthalates Tax Act.

How does a private person file the excise duties?

Filing excise duties as a private person must be done via tastselv.skat.dk which requires you to log in with your NemID/MitID after which you choose “kontakt”. In the inquiry to the Danish Tax Agency you must state which goods have been purchased and how many have been purchased. It is sufficient to enclose the invoice from the purchase. Hereafter, the Danish Tax Agency will let you know when and how the excise duties must be paid.

After 1 February 2022 it is only necessary to file excise duties as a private person, if you purchase goods on the Internet from other EU countries and arrange for transportation yourself, or if the company you buy from does not pay VAT and excise duties.

Contact the excise duty team

We hope this article has given you an insight into what you should be aware of if you have distance sales of goods liable to excise duties in Denmark.

Should you have any questions to the article, you are always welcome to reach out to us.