Danish VAT Ruling on Instagram Influencer Services Explained

On January 15, 2026, the Danish Tax Administration published a National Tax Court decision regarding whether services provided by a company, specifically creating and posting sponsored content on Instagram for partners, qualify for a VAT exemption for artistic or creative activities under Danish law. The dispute arose from the Tax Agency's decision to increase the company's VAT liability for the period from January 1, 2020, to December 31, 2021, by DKK 63,662 (around EUR 8,500), based on the conclusion that its services are not VAT-exempt.

Facts of the Case and the Court's Decision

The case includes a sole proprietorship operated by an individual who works as a social media content creator or influencer, promoting companies and their products, mainly in the fashion sector. Any paid collaborations with partners are disclosed as sponsored content on her social media platforms, and the owner has stated that all collaborations are transparently indicated on the posts.

The owner maintained an active Instagram profile in 2020 and 2021, posting content clearly labeled as advertisements or collaborations, often mentioning other companies. During this period, the company worked with an agency that secured contracts with partners to provide products. 

The agency would receive products from the partners, lend them to the company, and the company would use them to create content for the Instagram profile and to participate in the partners’ events, after which the products would be returned to the agency. The agency's February 2024 statement confirmed this.

The company presented multiple contracts with various partners that outlined detailed requirements for social media posts, including the number of posts, timing, content, tagging, and the use of the partners’ products. The company stated that remuneration for collaborations was paid in cash, gifts, or products, with payments generally going through the agency, which took a 30% commission.

Even though the company issued several invoices to the agency for its services, showing sales and VAT for 2020 and 2021, after reviewing the Instagram content, the Danish Tax Agency determined that certain products provided by partners constituted taxable goods in kind, calculating additional taxable income and VAT for the same period.

After examining all the facts and evidence, the National Tax Court concluded that the valuation of goods in kind needed to be reconsidered because there was reasonable doubt that the Danish Tax Agency’s original estimate was incorrect. Thus, the Court reduced the company’s VAT liability for the disputed period and partially amended the Tax Agency’s decision, lowering the company’s total VAT liability for the period in question to DKK 57,842 (around EUR 7,700).

Conclusion

Considering how influencers and social media content creators are reimbursed for services they provide, this ruling is vital for understanding how Tax Authorities may treat both cash payments and goods received in return for social media promotion. Ultimately, the ruling underlines that influencers' work, while creative, is primarily commercial and must be managed accordingly for tax purposes.

Source: Danish Tax Administration