In November 2023, the Supreme Court of Denmark (Højesteret) delivered in Case 18/2022, Lady & Kid A/S, Direct Nyt ApS, Harald Nyborg A/S and KID-Holding A/S v Ministry for Taxation.
During the late 1980s and early 1990s, Denmark has a form of national taxation that was subsequently found to be incompatible with the Sixth VAT Directive – the arbejdsmarkedsbidrag (‘ambi’) in Case C-200/90, Dansk Denkavit and Poulsen Trading by the CJEU.
The taxes paid by companies were subsequently being reimbursed to them by the state, but were unhappy with the state practice of the reimbursement. That got challenged, which in turn meant another case went to the CJEU, Case C‑398/09, Lady & Kids and Others v Ministry of Taxation, where the CJEU said the Danish reimbursement practice was not compatible with EU law.
In subsequent proceedings in the Eastern High Court (Østre Landsret), costs of 3.2m DKK were awarded for the companies’ legal costs, but they in fact had calculated costs of 10m DKK. They therefore filed a state liability claim against the Ministry of Taxation for their full legal costs.
In the present Supreme Court ruling at hand, the Supreme Court stated that state liability had not been established – legislative liability (on the repayment scheme), or judicial liability (for the Supreme Court refusing to make a reference for a preliminary ruling) – because the breach of EU law was not sufficiently serious.
The judgment of the Supreme Court of Denmark (Højesteret) in Case 18/2022, Lady & Kid and Others v Ministry for Taxation is available here.