VAT liability for penalties for violation of parking regulations

Case no. BS-12663/2019-HJR
Judgment delivered on 7 April 2022

Apcoa Parking Danmark A/S
vs.
The Danish Ministry of Taxation

The case concerned the issue of whether Apcoa Parking Danmark A/S was required to pay VAT on penalties imposed for violation of regulations on parking on private property.

Following the trial in December 2019, on 7 February 2020, the Supreme Court submitted a question for a preliminary ruling to the Court of Justice of the European Union on the interpretation of the relevant EU Directive.

In its judgment of 20 January 2022 in case C-90/20, Apcoa Parking Danmark A/S v Skatteministeriet, the ECJ answered the question referred to it. Based on this answer, the Supreme Court held that the penalties at issue in the case must be regarded as consideration for a supply of services within the meaning of Section 4(1) of the Danish VAT Act and, as such, subject to VAT.

The High Court had reached the same conclusion.