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Denmark VAT
Denmark comes under the EU VAT rules and is part of the EU single market economy. VAT Directives are issued by the EU, laying out the principles of the VAT regime to be adopted by the member states, including Denmark. These Directives take precedence over the local legislation.
Denmark VAT law
Denmark introduced VAT, known as moms, in 1967. It is administered by SKAT, the Danish Customs and Tax Administration.
Danish VAT registration
Foreign companies may register for VAT in Denmark without the need to form a local company – this is known as non-resident VAT trading. There is no VAT threshold in Denmark for the registration of foreign traders and a foreign business must register for VAT from the first day of starting activities in Denmark. This also applies where foreign businesses execute intra-community acquisitions, as these may trigger the need to VAT register.
Non-EU companies may need to appoint a local fiscal representative in some cases.
There are strict rules on when a registration can be permitted. Common scenarios which require a Danish VAT registration include:
- importing goods into the EU via Denmark
- buying and selling goods within Denmark
- holding goods in a warehouse in Denmark as stock
- selling goods from Denmark to other EU countries
- acquiring goods from other EU countries into Denmark
- distance selling to private individuals in Denmark from another EU country, e.g. internet retailing.
Registering for Danish VAT generally takes around three weeks from the date when the application has been submitted, although this can vary.
Denmark VAT compliance
There are detailed rules controlling the recording and processing of Danish transactions. These include guidelines on:
- Danish invoice requirements
- foreign currency invoicing and reporting
- correcting errors in previous returns
- what records must be kept.
Danish VAT rates
Since 1992, the standard VAT rate in Denmark is 25%. There are no reduced VAT rates in place and the only two rates of VAT are 25% and 0%. There are also exempt supplies.
Danish VAT returns
Companies with a Danish VAT number must submit periodic VAT returns detailing all taxable supplies (sales) and inputs (purchases). Returns are submitted monthly, quarterly or bi-yearly, with the filing periodicity depending on the annual revenue. The deadlines for VAT returns also vary depending on the filing periodicity.
Returns must be filed electronically through the TastSelv Erhverv system (e-tax for businesses).
Denmark - Intrastat and EC Sales Lists
In addition to VAT returns, companies may be required to submit extra statistical information. The Danish Intrastat system (or supplementary statistical declaration) requires a monthly return listing all movement of goods between Denmark and other EU-member states. There are annual thresholds for these filings.
The EC Sales List return contains information on the VAT numbers of EU customers and the values of sales. EC sales lists are filed either monthly or quarterly.
Danish VAT refunds
If a foreign company is not making taxable supplies in Denmark but is incurring Danish VAT on local goods or services, then Danish VAT may recovered through a VAT reclaim.
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