Danish Digital Bookkeeping Obligation by July 2024

Danish Digital Bookkeeping Obligation

The Danish digital bookkeeping obligation moves forward. This obligation mandates companies the use of a registered digital bookkeeping system. A registered bookkeeping system is a digital accounting system that has been reviewed by the Danish Business Authority to ensure it complies with legal requirements. 

The Danish tax authorities have published the timeline for the introduction of this obligation, which is rolling out in phases:

• Timeline for Danish digital bookkeeping obligation  

• • From 1 July 2024
    Businesses submitting annual reports under the Danish Financial Statements Act and using a registered bookkeeping system. The obligation to book digitally starts from the new financial year.
  • From 1 January 2025
    Businesses submitting annual reports under the Danish Financial Statements Act and currently using a non-registered bookkeeping system. The obligation to book digitally starts from the new financial year.
  • From 2026
    Personally owned companies with an annual turnover of more than DKK 300,000 in two consecutive years (e.g. 2024 and 2025). The obligation starts from 2026.

Foreign companies VAT registered in Denmark may have to comply with this requirement if they are required to submit Annual accounts, or if their annual turnover exceeds the DKK 300,000 in two consecutive years.

Service providers were required to notify their digital bookkeeping solutions to the Danish Virk. If the solution was already on the market, the service provider had to notify the authorities before 31 October 2023. As a consequence, Danish Virk published a list of registered standard accounting systems meeting the requirements.

Digital Bookkeeping System's Requirements 

The authorities are verifying that bookkeeping systems approved meet the following requirements:

1. The system must support the recording of the company’s ongoing transactions, including attaching relevant documents to each entry, and securely store these records and attachments for five years.
2. It must also implement appropriate technical and organizational IT security measures to ensure a high level of security for the system’s essential functions, such as user and access management, as well as automatic backups and appendices.
3. Furthermore, the system should facilitate the automation of administrative processes, such as sending and receiving standardized e-invoices and enabling standardized accounting in accordance with a public standard chart of accounts. 

Finally, this obligation must not be confused with electronic invoicing. Although the standard digital bookkeeping systems must allow the issuance of electronic invoices, the new obligation does not dictate how companies must issue their invoices. Official information can be found here.