Dear Rights Holder,
The Danish Parliament has adopted an amendment to the VAT Act, which entails that VAT will be applied to royalty payments to and from organisations such as Producent Rettigheder Danmark (PRD). Specifically for PRD, this means that remunerations from the 2025 royalty year onwards will be subject to VAT.
As the rights holder’s sale to PRD is subject to VAT, PRD will, as a new measure, add 25% VAT to payments made to Danish rights holders from the 2025 royalty year onwards. The only exceptions are rights holders with a total annual turnover below DKK 50,000 who have chosen not to register for VAT. Furthermore, blank media levies, referred to as Private Copying (PRK) at PRD, are not subject to VAT.
Royalty payments relating to the 2024 royalty year and earlier will remain exempt from VAT.
In connection with the amendment to the VAT Act, PRD will also change its procedure for settling royalty payments and will transition to so-called self-billing (referred to by the Danish Tax Agency as “settlement notes”), with the aim of ensuring a smooth process.
This means that, as part of the settlement procedure, PRD will issue an invoice on behalf of each individual rights holder, including remuneration plus VAT—a self-billing invoice—where the rights holder will appear as the invoicing party. The self-billing invoice will form the basis for the rights holder’s subsequent VAT reporting.
In order to make use of self-billing, an agreement must be in place whereby the rights holder, as the recipient of remuneration, consents to this procedure and authorises PRD to issue such self-billing invoices. PRD therefore requests that each Danish VAT-registered rights holder approves this by marking box 1 below and verifies that the CVR/VAT number stated in “My PRD” is correct.
Rights holders with a total annual turnover below DKK 50,000 who have chosen not to register for VAT are requested to indicate this by marking box 2 below.
Non-Danish rights holders are likewise requested to approve self-billing by marking box 1; however, the issued self-billing invoices will not include VAT but will instead be issued with reference to the “Reverse Charge” mechanism.
PRD will not be able to make payments for the 2025 royalty year until a selection has been made.
