In the following cases, you must always register for VAT:
You can also choose to register for VAT before you reach the amount limits. Some artists choose this solution, e.g. in order to obtain benefits from the VAT system. It can, for example, be the case if you are associated with a gallery, regularly receive grants or subsidies for your art production or have major art assignments.
For visual artists, it may be that you have to settle VAT at 3 different VAT rates, namely 25% (ordinary VAT rate), 5% (art VAT) and 0% (VAT-free services).
All businesses must be registered for VAT when the turnover exceeds DKK 50.000. This also applies to artistic companies. However, it will often only be part of the artistic activity that is covered by the normal VAT rate. These are tasks that cannot be attributed to the rules for artists' VAT or as VAT-free artistic services. Exhibition remuneration, which only concerns the lending of works, will always have to be included under the normal VAT rate.
If an artist's sales of his own works during the year exceed DKK 300.000, he becomes liable for VAT for the rest of the year and the following year.
VAT must only be paid on sales that take place after the registration obligation has occurred. The registration obligation can come into effect during the year. When it ceases, it will always be at the end of a year. If the registration obligation has ended, no VAT must be paid on sales after this time.
The basis for calculating the output VAT for artists' first sales is 20 per cent of the sales sum, corresponding to an effective VAT rate of 5 per cent (20 per cent of 25 per cent).
The basis for calculating the input VAT is the costs for the purchase of materials etc. for the production. There is a right to deduct the entire VAT amount, that is 25 percent.
According to the VAT Act, writing and composing activities as well as other artistic activities are exempt from VAT. Other artistic activity means lecturing, performance and the like.
One series of art assignments will typically be covered by the area of VAT-free artistic services. This applies, for example: Teaching, performance, artist talks, projects under the house artist scheme, illustrations for magazines, etc.
Art assignments have in some cases been considered the delivery of an artistic service rather than the delivery of a work of art.