Report on VAT refund scheme for municipalities and regions

Pursuant to Section 1(2) and paragraph 3, and Section 3 of Act No. 497 of 7 June 2006 on competitive equality between municipalities and regions’ own production and the purchase of services in external suppliers in relation to expenditure of surplus value tax, etc., as amended by law No 1548 of 21 December 2010, and § 3 of Law No 550 of 18 June 2012 on free municipalities:

Chapter 1

Refund of refunds

§ 1. The amounts refunded by the refund scheme include VAT payments from municipalities and regions relating to the purchase of goods and services posted on the main accounts 0-6 in the budget and accounting system for municipalities and on the main accounts 0-4 in the budget and accounting system for regions, except for VAT payments which can be deducted as incoming VAT in a VAT account. In addition, certain expenditure is reimbursed for paysum tax, which is indirectly paid by municipalities and regions.

Substances. 2. The circulation after paragraph 1 shall be determined as the sum of the following costs of VAT and paysum tax:

1) All VAT expenditure relating to expenditure (excl. expenditure incurred in main account 1. Consultancy companies in the budget and accounting system for municipalities) as accounting - according to the Ministry of Finance and the Ministry of Foreign Affairs authorised rules - are registered on the specific accounts:

a) Main article 2 Sale, excl. art 2.6 Buy of land and buildings (excluding VAT).

b) 4.5 Construction and craftsmanship.

(c) 4.9 Other services etc.

d) The decision does not include the VAT costs of municipalities on function 2.32.31 Bus operation, 2.32.33 Ferry operation, 2.32.35 Railway operations and 5.32.30 Older housings, as well as the region's VAT expenses of function 3.10.01 Discharge to traffic companies and 2.10.30 General older dwellings.

2) Certain expenses for VAT and pay-sum tax, which are indirect paid by municipalities and regions through payment and subsidies. The amounts included in the refund scheme shall be calculated as the municipality or region's share of the amount of the booked by the amounts specified in Annex 1, the VAT shares and the pay amount percentages and the current VAT rate divided by the sum of the VAT rate and 100, in accordance with the calculation criteria. Payment and reimbursement schemes, which, in accordance with the rules of the Ministry of Finance and the Ministry of Foreign Affairs, are not included in the statement of reimbursement.

§ 2. Communal tax expenditures and indirect paid salary fees, cf. section 1, are reported to the refund of the municipality, which is the accounting of the community.

Substances. 2. Joint Communal undertakings, which for administrative reasons are independent accounting, may, where approval from the Ministry of Finance and the Ministry of Foreign Affairs, pursuant to paragraph 3, report reimbursement requirements from the refund scheme, through the Community municipalities.

3. However, independent accounting-leading joint-communal companies within the areas of rescue tool and central washing are exempt from approval after paragraph. 2.

4. Self-employed accounting joint-communal supply and supply-like companies and traffic companies cannot obtain approval after paragraph. 2.

§ 3. The municipalities and regions can report acontomoms and pay-tax, cf. section 1, to self-delivering institutions with the transfer of operations to reimbursement from the refund scheme until the self-owned institution’s accounting is recorded with specificity in relation to the municipality’s or region’s accounting.

Substances. 2. The income statement provided with the auditor's statement of reimbursement requirements for the refund scheme shall not include amounts relating to acontomoms and pay-sumer tax by paragraph. 1.

§ 4. The buyer’s tax expenditure included in the calculation of rent income is not covered by the refund.

Substances. 2. The exception of paragraph 1 shall be administered in the way that the refund of the rules laid down in section 1 is reduced by an amount calculated as 7.5 per cent of the book revenues in the arts account 7.1. Own rent income.

3. House rental income registered on art 7.1, function 5.32.30 Older dwellings, 2.32.31 Bus operation, 2.32.32.33 Ferry operation, 2.32.35 Railway operation, 3.10.01 The older dwellings are not covered by the provisions of section 4(1) and 2.

§ 5. The purchase costs incurred by the purchase of goods and services financed by contributions and grants to the municipality or region are not covered by the refund.

Substances. 2. The exception of paragraph 1 shall be administered in the way that the refund of the rules laid down in section 1 is reduced by an amount corresponding to 17.5 per cent of the municipality or region revenue from the following grants and contributions. The amount is calculated on the monthly balance sheet as deduction under corrections:

1) Operator and plant supplements from foundations, private companies, private associations, institutions, etc.

2) Funds of the EU Structural Funds are subject to the Danish state, and direct funding from the EU.

3) 3) Loans which, due to favourable terms in respect of the payment of interest and deductions, shall not be recognised to the municipality or region’s lending pursuant to the Danish Ministry of Finance and the Communication of the municipalities’ borrowing and notification of guarantees etc. and the Danish Ministry of Finance and the Danish Ministry of Foreign Affairs on the banks and notice of guarantees etc.

3. Prior to research registered on function 1.10.01 Hospitals in regions and features 4.62.82-4.62.90 in municipalities are exempt from refund after paragraph. 2.

§ 6. If a facility, for which VAT refunds have been obtained within a period of 5 years are sold or transferred, the refunded purchase amount must be refunded to the refund scheme. The amount is calculated on the monthly balance sheet as deduction under corrections.

Substances. 2. The five-year period is calculated from the time of approval of the plant accounts for that work.

3. If the same purchase tax costs in a plant, for which VAT refunds have been obtained from the refund scheme will be reimbursed according to VAT added tax, the refund scheme must be refunded. The amount is calculated on the monthly balance sheet as deduction under corrections.

4. paragraph 1 shall not apply to installations which, in accordance with the notice No 877 of 16 September 2005 on the distribution of assets and liabilities, rights and duties and employees arising from assignment, transfers on 1 January 2007 in connection with the communal reform or notice No 868 of 16 September on the sharing of municipalities transferred between county municipalities, municipalities, the Danish Ministry of Nursing, the Capital Regions and Government. 1. Neither does not apply to installations, which, in accordance with the notice No 877 of 16 September 2005 on the distribution of assets and liabilities, rights and duties and employees arising from the assignment, the 1 January 2007 in connection with the municipal reform or notice no. 868 of 16 September 2005 on the sharing of municipalities are transferred between on one side of the authorities referred to in the 1st section and on the other side, the group of the institutions referred to in paragraph 1.

§ 7. The buyer’s tax costs incurred by the purchase of goods and services used for the natural reward of personnel are not covered by the refund.

Substances. 2. The exception of paragraph 1 shall be administered in the way that the reimbursement of the rules laid down in section 1 is reduced by the purchase price incurred by the purchase of goods and services used for natural remuneration of personnel. For the booked expenses for goods and services, which include the purchase price relating to municipal or regional business and purchase costs relating to natural remuneration of staff, it is only the part of the purchase price used for municipal or regional business which is subject to the refund. The proportion is estimated. The part of the purchase price relating to the natural remuneration of staff is performed on the monthly balance sheet as deduction under corrections.

Chapter 2

Refusion of acquisition services in free municipalities under law on free municipalities

§ 8. The buyer’s tax costs incurred by the purchase of goods and services used for purchase services, which the home in law no 550 of 18 June 2012 is not included by the refund.

Substances. 2. The exception of paragraph 1 shall be administered in the way that the reimbursement of the rules laid down in section 1 is reduced by the purchase price incurred by the purchase of goods and services used for purchase services. For the booked expenses for goods and services, which includes the purchase invoice expenses relating to communal business and purchase costs relating to acquisition services, it is only the part of the purchase invoice expenditure used for municipal business which is subject to the refund. The proportion is estimated. The part of the purchase price relating to acquisition services is carried out on the monthly balance sheet as deduction under corrections.

Chapter 3

Withdrawal of reimbursement

Section 9. The amount of refund under Section 1 shall be paid monthly.

Substances. 2. A refund is reported on the basis of the balance of function 7.65.87 for municipalities and function 5.80.95 for regions to the Ministry of Finance and the Ministry of Foreign Affairs within 10.days of the following month. Any doubts relating to which amounts can be notified to reimbursement are finally determined by the Minister of Finance and the Interior.

3. The balance sheet ultimo the financial year, which includes amounts to reimbursement posted in the accounting period for the financial year, is sent to the Ministry of Finance and the Ministry of Foreign Affairs within 1 week of May in the year after the refund year. This statement shall be reviewed by the municipality or the auditor of the region and provided with the statement of the auditor.

4. As a refund after paragraph 1 was held in the accounting period for a financial year to a financial year, a refund is reported from the refund scheme together with VAT expenses incurred in January for the financial year.

Section 10. The amount of reimbursement by Section 9 shall be paid by the Ministry of Finance and the Ministry of Foreign Affairs as soon as possible in the month following the month the refund is to be the Ministry of Finance and the Ministry of Foreign Affairs.

Substances. 2. Refusion amount is rounded to the entire crown.

Chapter 4

Dispensation option

§ 11. In special cases, the Minister of Finance and the Interior may decide that the settlement of reimbursement is made in another way than established in this notice.

§ 12. In special cases, the Minister of Finance and the Interior may provide exemption from Section 1, Section 5 and Section 6.

Chapter 5

Power

§ 13. The decision shall enter into force on 27 January 2013.

Substances. 2. At the same time, notice no 1337 of 17 December 2012 on VAT refund scheme for municipalities and regions.

Annex 1

Calculation of VAT and pay rates:

For each function on the positive list, a VAT share rate reflects how large a proportion of the cost of the performance taxed. Similarly, for those with * marked relevant services, a paysum share rate reflects how large a proportion of the total cost of the performance paid. The paysum share rate is subsequently resuitable for the VAT share rate by multiplying the paysum share rate by (4.12/104,12)/(25/125), as private suppliers, in the relevant areas, pays a paysum tax of 4.12% of the paysumer / deficit. After this, the amount of pay-sumer shares and the VAT share rates are divided into one VAT and pay-sumer percentage. Fx is the pay-sum share rate for hospitals 70 per cent, giving a VAT and pay-sum share rate of 14 (70*(4,12/104,12)/(25/125)).

Example of the amount for reimbursement for municipalities:

grants of DKK 1,000 (function 0.32.31 Stadium, sports facilities and swimming pools, art 5.9).

Amount: €50 x 55% x 25/125=110 kr.

The following is recorded in the municipal budget and accounting system:

– – The expense, excluding the calculated VAT expenses, i.e. DKK 1,000 - DKK 110 = 890 kr. is registered on function 0.32.31 stadium, sports facilities and swimming pools, art 5.9.

– – The calculated VAT expenses, i.e. DKK 110 are registered on function 7.65.87, grouping 003.

– – The VAT refund, i.e. 110 kr. is registered on function 7.65.87, grouping 002.

Example of the amount for reimbursement for regions:

grants of DKK 1,000 (function 1.10.01 Sygehuse, art 4.0).

Amount of refunds: €50 x 39% x 25/125=78 kr.

The following is recorded in the budget and accounting system for regions:

– – The expense, excluding the calculated VAT expenses, i.e. DKK 1,000 – DKK 922, is registered on function 1.10.01 Sygehuse, art 4.0.

– – The calculated VAT expenses, i.e. DKK 78 are registered on function 5.80.95, grouping 003.

– – The VAT refund, i.e. DKK 78 is registered on function 5.80.95, grouping 002.