Denmark

VAT Basics

What are the VAT rates in Denmark?

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%.

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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.

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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.

You will find here and here useful information about VAT deduction in Denmark. Also, have a look at the legal guidance in VAT deduction in Denmark.

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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.

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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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VAT registrations and simplifications in Denmark

When Do I Need a Danish VAT Number?

Generally, a foreign business must register for VAT in Denmark as soon as a taxable supply is made. The following are the usual examples of taxable transactions:

• Domestic supply of goods not reverse charged: A supply of goods located in the Denmark where reverse charge does not apply requires a VAT registration of the supplier.
• Supply of services not reverse charged: Foreign non-established businesses supplying services on which Danish VAT is due by the supplier must register for VAT. These services are rather exceptional, as the general B2B rule would apply.
• Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
• Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
• Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT.
• Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.

VAT registration must be applied for no later than 8 days before the start of the business subject to registration. However, backdated registrations are possible in Denmark.

There is a registration exemption threshold for Danish established companies amounting to DKK 50,000. This is the VAT registration threshold applicable to small established businesses (the converted threshold is equivalent to approximately EUR 6,700). Also, there is an optional VAT registration regime for taxable persons involved in the letting of immovable property for business purposes.

Non-established companies must submit apply for VAT registration before performing any taxable transactions. The tax authorities may require these taxpayers to provide a guarantee based on the VAT liability if it is assessed a likely risk of loss of tax revenue. In practice, we have never experienced this special request from the tax office.

VAT registrations are handled by the Business Authority or Erhervysstyrelsen.  

More details about VAT registration in Denmark can be found here and here including the registration form for foreign companies. Also, find here the legal guidance for VAT purposes.

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Fiscal Representative Requirements in Denmark

Companies established in a non-EU country other than Norway, Iceland, the Faroe Islands, Isle of Man, UK, the Åland Islands and Greenland need to appoint a fiscal representative in Denmark.

Also, a fiscal representative will be required in case the non-EU company performs imports or exports from the Danish VAT number – this also applies to those countries which have signed a mutual agreement instrument with Denmark -.

The VAT representative shall be a person resident in Denmark or a company established in the country. Also, the VAT or fiscal representative is jointly and severally liable for the VAT due by the foreign taxpayer.

The resident fiscal representative can represent several foreign companies with one VAT number in certain specific scenarios:

• Delivery of goods according to ML § 36, subsection 1, no. 5 , to other EU countries.
• Delivery of goods directly from a tax warehouse to another EU country or to places outside the EU.
• Acquisition of goods in this country from another EU country and the goods are placed directly in a tax warehouse, in Copenhagen's Freeport or exported to places outside the EU.

In such cases, the resident representative completes a combined VAT return for the foreign companies (transactions mentioned in § 93 of the VAT Executive Order). After subsection 3, the resident representative must keep an account for each individual liable for VAT.

Find the legal guidance on VAT registration provides clarification to the fiscal representative requirement.

Find here the Marosa overview about the fiscal representation requirement.

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VAT Groups in Denmark

VAT grouping or fællesregistrering is possible in Denmark.

The condition to apply for VAT grouping is that the applicant entities run all businesses liable for VAT registration. Nevertheless, the tax authorities may grant authorization to a taxable person carrying out taxable supplies to register together with businesses involved in exempt activities and non-taxable persons. In the latter case, one group member must hold, directly or indirectly, all shares in the other members and the members must be established in Denmark.

In addition, the following VAT grouping rules apply in Denmark:

• Only Danish-established businesses can be part of a VAT group. Foreign companies registered with a fiscal representative in Denmark cannot be part of a VAT group.
• VAT grouping is optional in Denmark. Companies can apply for a VAT group when meeting the requirements, or they can choose to remain separate entities for VAT purposes.
• There is a specific time frame to apply for the VAT groups regime: the application must be submitted at least one month before the change is desired.
• Once the application is approved, a group VAT number is granted to the group. Jointly registered companies are considered as one company for VAT purposes.
• Intra-group transactions are disregarded for VAT purposes.
• Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
• The minimum period for a VAT group is three years. After the first three years, entities may come in and out of the French VAT group with the representative’s consent.
• For VAT refund purposes, each member would be considered a separate business unit.
• Members of a VAT group submit one single consolidated VAT return. It is not possible to file separate VAT returns for each entity.

Find here more information about VAT groups in Denmark. Also, here the registration information.

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Consignment and Call-off Stock in Denmark

The EU introduced a call-off stock simplification that all EU Member States must implement. This was put into place so that businesses that operate under a consignment stock structure do not have to VAT register in the country of destination. Denmark has introduced the consignment stock simplification.

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Danish Bad Debt Relief

Bad debt refers to an unpaid invoice for which the supplier has paid the VAT to the tax administration: this is, an invoice has been issued with VAT, reported in the VAT return and the VAT amount has been paid to the tax authorities but the whole price has not been collected from the customer.

This is often due to the client´s bankruptcy, insolvency or simple missed payments to suppliers. In these cases, most countries allow to recover the VAT initially paid to the authorities, however, the conditions change from one country to another.

Bad debt relief refers to the possibility of recovering the VAT from that invoice. Denmark allows for bad debt relief by adjusting the out VAT paid in the periodic VAT return. In order to be able to deduct the bad debt:

• The loss is recognized: the supplier must be able to demonstrate the loss by use of a court order.
• When the debtor is declared in bankrupt procedure or the debtor is dead, this is treated as the equivalent to a court order.
• Otherwise, it is sufficient that the Supplier has made an effort to claim the amount through a debt collection agency, a lawyer or by any other means without success.

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Danish Import Deferral and Postponed VAT Accounting

Denmark has introduced a postponed import VAT accounting mechanism where import VAT can be reported as input and output VAT (reverse charged) in the VAT return instead of being paid to the authorities upon importation.

Import VAT deferral, meaning delaying the payment of VAT for a given period, is not applicable in Denmark. You should however be aware of the difference as postponed import VAT accounting is sometimes referred as deferral import VAT.

The application shall be submitted by the 15th day of the month previous to the desired start of the postponed import VAT accounting application.

Find here more information about imports in Denmark.

Have a look at our general article about postponed import VAT accounting.

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Danish Customs and VAT Warehouses

Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.

VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive.

Find here more information about special customs regimes in Denmark. Finally, find here official EU guidelines on Customs’ special regimes.

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Special VAT Schemes in Denmark

Businesses established in Denmark benefit from a registration threshold of DKK 50,000 a year. Apart from that simplification for small businesses, the following special regimes apply:

• Travel agents. Check the information about this special scheme in the Danish Legal Guidance.
• Margin scheme for second hand goods, works of art, collectibles and antiques. Check the information about this special scheme in the Danish Legal Guidance.
• Investment gold.

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Reverse charge in Denmark

Reverse Charge for Non-established Companies in Denmark

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.

Denmark has introduced this reverse charge on certain supplies. Supplies made by a non-established supplier in Denmark fall into the reverse charge mechanism in the following scenarios:

• Supplies under triangulation arrangement by a non established Intermediate supplier
• Supplies of goods with installation to a Danish taxable person and located in Denmark
• Supplies of natural gas or electricity through distribution systems by non-resident suppliers to taxable persons registered in Denmark.

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Reverse charge on supplies of goods with installation

Check the Legal Guidance about reverse charge on supplies of goods with installation.

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Reverse charge on supplies of natural gas, electricity, heat and cooling energy

Check the Legal Guidance about reverse charge on supplies of natural gas and electricity.

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Reverse Charge on B2B Services

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business resident outside Denmark supplying services to a Danish based customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Denmark provided the following conditions are met:

• Services connected to immoveable property are located where the property is located.
• Passenger transport services will be located where the transport takes places (apportioned if necessary).
• Catering services are located where the catering takes place.
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
• Access to conferences, fairs and exhibitions is located where the event takes place.

The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.

Also, have a look at specific content about carousel fraud published by the Danish tax authorities.

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Reverse Charge on Specific Goods and Services in Denmark

Domestic reverse charge may also apply on the supplies of certain goods and services made by companies established in Denmark.

• Supply of CO2 emission allowances. The Supplier must be a Danish established company and the customer a taxable person.  
• Supplies of investment gold. The Supplier must be a Danish established company and the customer a VAT registered business in Denmark.  
• Supply of metal scrap. The Supplier must be a Danish established company and the customer a taxable person.  
• Supplies of mobile phones. The Supplier must be a Danish established company and the customer a taxable person.
• Supplies of integrated circuit devices, when included on the final product. The Supplier must be a Danish established company and the customer a taxable person.  
• Supplies of game consoles, tables and laptops. The Supplier must be a Danish established company and the customer a taxable person.  
• Supplies of gas or electricity to a distributor. The Supplier must be a Danish established company and the customer is a reseller.  

Check the Legal Guidance about reverse charge scenarios in Denmark.

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VAT returns in Denmark

Frequency of VAT Returns in Denmark

The frequency of filing of the periodic VAT returns depends on the annual turnover of the previous year in Denmark. If your business has just registered for VAT, you must report VAT quarterly for at least one and a half year.

The following reporting periods apply under the normal regime:

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Frequency of filing

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Due Date of Danish VAT Returns

The VAT return deadlines applicable in Denmark depend on the reporting frequency:

Check the exact deadline in the tax calendar published by the tax authorities, or in the taxpayer’s online account for submitting VAT returns.

More information about due dates for making VAT payments and submitting the periodic VAT returns is available in the tax calendar published at the website of the tax authorities.

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VAT Payments in Denmark

Non-established companies will often make payments from an overseas account.

The following details are used for paying taxes from abroad when you choose the method of paying via bank transfer:

• Name of the recipient: Danish Tax Agency
• IBAN code: DK87 0216 4069 1633 94
• SWIFT or SWIFT code: DABADKKK
• Payment reference (Meddelelse til modtager): 8-digit CVR.no/SE no. (Only numbers - no other messages).

Have a look here at the information about how to pay taxes from abroad in Denmark.

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VAT Refunds in Denmark

The excess of input VAT is automatically and immediately refunded to the taxpayer. This is, when a taxable person declares more VAT deductible – e.g., due to purchases-, than VAT collected from sales, the difference is a VAT credit which shall be reimbursed to the taxpayer.

Before the tax authority can pay out the VAT credit, the following conditions must be met:

• You have activated your NemKonto to transfer the money.
• You have reported all the relevant transactions and meet reporting obligations (e.g., VAT returns). In TastSelv Erhverv you can see if there is anything pending to be reported.
• The payout limit on your tax account must be set to DKK 0. Check it in TastSelv Erhverv under Tax account.
• You must not have debts on your tax account or with the Debt Agency. If you have debt, the money that you may have to your credit will first of all go towards paying the amount you owe. Remaining money will then be transferred to your company's NemKonto.

It can take up to 3 weeks from the date on which you make your VAT return before the amount that you may have to your credit will be available in your company's NemKonto.

On your company's tax account in TastSelv Erhverv under Account status , you can always see whether your receivables have been paid to your company's NemKonto or to the Debt Agency.

The right of deduction begins at the time when the VAT liability begins. If a person liable for VAT has forgotten to make VAT deductions for purchases in previous VAT periods, the person must request the Danish Tax Agency to resume the VAT liability for the period in which the purchase was made.

Also check here the section VAT to the credit.

Finally, read more about the Danish Tax Account and about the right of deduction.

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Nil and Corrective VAT Returns in Denmark

A nil VAT return needs to be submitted even if there are no transactions to be reported for that period. You must then report DKK 0 (zero reporting). If you do not report, the tax authorities will make a temporary assessment for a value of DKK 800 of VAT.  

Errors or omissions in a VAT return must be corrected. You will need to submit a corrective VAT return by reopening the correspondent reporting period. Fines may be imposed.

Unless extraordinary cases, the statute of limitations that applies for correcting previous periods is 3 years.

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VAT Penalties in Denmark

Find here the official information about penalties.

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Danish Tax Authorities contact

• Email address about digital bookkeeping obligation: digitalbogfoering@erst.dk
• Danish Customs and Tax agencies

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ESL Returns in Denmark

Due Date and Frequency of ESL Returns in Denmark

The due date for submitting monthly or quarterly ESL returns is always the 25th day of the following month. You can either type the information or upload a file.

The frequency of filing is usually monthly, but you can apply to start submitting ESL returns on a quarterly basis.

Find here the taxpayer’s calendar published by the Danish tax authorities, where the ESL returns are included.

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Nil and Corrective ESL Returns in Denmark

If there are no intra-Community transactions to be reported in a given period, a nil ESL is NOT due.

In case of errors in previous reporting periods, you must submit a corrective ESL return in Denmark.

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Penalties for Late ESL Returns in Denmark

The late submission of ESL returns is punished with a reminder penalty of DKK 65.

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Intrastat returns in Denmark

Frequency of Filing and Due Date of Intrastat Returns in Denmark

Like in most EU countries, Danish Intrastat returns are filed monthly. They follow the calendar month.

The due date to file these returns depends on the Group to which the taxpayer belongs:

• Group 1 (2023): annual import over 22 million and/or annual exports over DKK 16.5 million. The deadline is earlier, around the 14th day of the following month.
• Group 2 (2023): annual imports below DKK 22 million. and exports between 11 and 16.5 million. The deadline for these taxpayers is slightly longer, around 20th of the following month.

However, the exact deadlines must be verified in the Intrastat calendar published by the tax authorities.

Additional resources: The exact deadlines must be verified in the Intrastat calendar published by the tax authorities. Check here the Intrastat calendar for 2024.

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Danish Intrastat Thresholds

The following annual Intrastat thresholds apply in Denmark (calendar year):

• Arrivals: DKK 41,000,000
• Dispatches: DKK 11,300,000

These thresholds are computed annually according to the calendar year. Once filed, a complete calendar year needs to be covered by a company in order to stop filing these returns. For example, if a company exceeds the threshold in March 2024 on arrivals, Intrastat returns for arrivals are due until December 2025. These thresholds are calculated according to the invoice value. The authorities monitor the thresholds and often send letters to each taxpayer requiring them to file missing Intrastat return.

Have a look at our overview of Intrastat thresholds.

Also, you can find here the official information about Intrastat thresholds in Denmark.

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Reporting of Specific Scenarios in Denmark

Very often, the transactions reported in the Intrastat return are standard sales from one taxable person to another. However, a number of scenarios have specific reporting requirements.

The nature of transaction code in the Denmark have been recently updated and have now two digits. You can find the nature codes for specific scenarios under Appendix 3.A of the Intrastat manual. See the official Intrastat manual under the following link.

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Nil and Corrective Intrastat Returns in Denmark

If no transactions are to be reported, a nil Intrastat return must be filed.

Regarding corrections, if an Intrastat return has been submitted showing wrong or incomplete information, a new return needs to be submitted electronically correcting the wrong data and adding the data initially missed.

If you want to correct an already approved report you need to submit a replacement return: go to "Dan report" and select "Compensation report" and the period. You can check the guide available online named Compensation or replacement declaration.

Alternatively, you may contact Statistics Denmark by sending an email to Intrastat@dst.dk .

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Intrastat Penalties in Denmark

The late submission of Intrastat returns is punished with a fine of DKK 550.