The VAT issues are quite similar for foreign companies supplying goods or services either to Denmark or to Germany.
First of all, it must be determined whether a foreign company must register for Danish or German VAT according to the rules in Denmark or Germany, respectively.
If a local VAT registration is required, the foreign company must register for local VAT. Thus, the foreign company must charge local VAT to the customers and pay the VAT to the local tax authorities.
Further, the foreign company must file local VAT returns and declare output and input VAT. Thus, the deduction of input VAT on costs in relation to the supplies of goods and services in Denmark is made directly via the VAT return.
If the foreign company is not required to register for local VAT, the foreign company must be familiar with the place of supply rules in order to determine whether the foreign company must charge local VAT or whether the invoice should be issued without any VAT, e.g. according to the rules on reverse charge.
Please note that special rules apply in specific situations, e.g. Danish rules on foreign companies using foreign sub-suppliers and German rules on supplies to German territorial waters etc.
If the foreign company is not obligated to register for local VAT, the foreign company must apply the rules on VAT refund regarding input VAT on costs in relation to the supplies in Denmark or Germany and meet the deadline for submission of VAT refund claims (30 September the following year for Denmark and Germany).
The whole Fehmarn Belt link will include the Danish VAT territory, an exclusive economic area (no man's land so to speak, to which supplies are not subject to any VAT) and the German VAT territory.
During the last couple of years the Danish Tax Ministry has been requested to consider the possibility for deciding that the whole Fehmarn Belt link would be considered as Danish VAT territory (except for the German onshore installation which would still be German VAT territory). The Danish Tax Ministry has not publicly informed of the status or the result of such considerations.