DenmarkManual

VAT in Denmark

Value Added Tax in Denmark is also known as "Merværdiafgift o Moms” (DPH) in the local language.

What are the VAT rates in Denmark?

The VAT rates applicable in Denmark are the following:

  • Standard Rate: 25%.
  • There are no reduced VAT rates. Some products are either 0% vat rate or exempt from VAT.

Consequently, unless it is expressly stated that a product or service is exempt or subject to 0% VAT, all goods and services will be taxable at 25%.

VAT rates in Denmark by product and service

The standard VAT rate is 25%. The general or standard VAT rate will be 25%. The standard VAT rate will be applied in general for all goods and services for which no VAT exemption or 0% VAT rate is provided.

The 0% VAT rate will be applied to some goods and services, such as, example, newspapers, and periodicals, in paper or digital format.

Finally, the list of VAT-exempt supplies is longer than in other EU countries. For example, the following supplies of goods or services are exempt: taxis, buses, trains, and scheduled air transport, the services of writers and composers, and services related to cultural activities, including bookshops, zoos, museums, etc.

To confirm the VAT rate applicable to a particular product or service in Denmark, we recommend that you contact us.

  • Foodstuff
    25%
  • Water supplies
    25%
  • Pharmaceutical products
    25%
  • Medical equipment for disabled persons
    25%
  • Children´s car seats
    25%
  • Passenger transport
    Exempt, except for tourists bus or similar. 
  • Books
    Exempt
  • Books on other physical means of support
    Exempt
  • Newspapers
    Exempt
  • Periodicals
    Exempt
  • Admission to cultural services (theatre, etc)
    Exempt
  • Admission to amusement parks
    25%
  • Pay TV / cable
    25%
  • TV licenses
    25%
  • Writers / composers
    Exempt
  • Hotel Accommodation
    25%
  • Restaurant and catering services
    25%
  • Restaurants
    25%
  • Medical and dental care
    25%
  • Repair of shoes and leather goods
    25%
  • Repair of clothing and household linen
    25%
  • Hairdressing
    25%

VAT Deduction Limits in Denmark

Input VAT is generally deductible as long as the goods or services are used for business purposes.

However, certain expenses are subject to special rules:

  • Hotel accommodation: input VAT is 100% deductible provided the invoice is issued to the company and the expense is incurred for business purposes.
  • Restaurant meals: input VAT is 25% deductible if the expense is incurred for business purposes.
  • Employee meals and entertainment: input VAT is 100% deductible.
  • Attendance to conferences, fairs and exhibitions: input VAT is 100% deductible.
  • Business gifts: when the value is above DKK 100, input VAT is nondeductible.
  • Car expenses: the input VAT paid on the purchase, rental, or lease of a passenger car are nondeductible, as well as the maintenance costs. On the contrary, the expenses incurred for business purposes concerning vans and trucks, are usually 100% deductible. Find here more detail on car expenses deduction.

A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.

Additional resources: the VAT deduction limits are regulated in Arts. 37 to 42 of the Danish VAT Law. Also, find here and here useful information about VAT deduction in Denmark.

Have a look at the legal guidance on VAT deduction in Denmark.

 

Statute of Limitations in Denmark

The statute of limitations in Denmark is three years.

The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests. In case of severe negligence and under certain conditions, Danish tax authorities can extend this period to ten years.

The statute of limitations also determines the period a taxpayer can voluntarily correct any errors on past submissions, and deduct input VAT.

 

You can find an overview of the statute of limitations in Europe under the following link.

Tax point rules in Denmark

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

  • General rule: When the supply of goods or services is subject to the mandatory issuance of an invoice, then the tax point is by the time of the supply of the goods or services. If the invoice is issued prior to the supply of goods or services, the tax point arises on the invoice date.
  • Prepayments or advanced payments create a tax point because an invoice must be issued for each instalment or prepayment. Special rules apply for vouchers.
  • Continuous supplies of services: if the intra-Community acquisition of a service covers a period of more than 1 year, VAT has to be accounted on an annual basis. Tax point is considered to have occurred the last day of the year.
  • Intra-Community acquisitions and supplies: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier
  • Import: Tax point occurs when the goods are imported according to the relevant import documents.

Tax point rules are regulated in Articles 23 and following of the Danish VAT Act.

 

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