VAT Returns in Denmark

If your business is registered in Denmark, you must file VAT returns Denmark regularly, either monthly, quarterly, or biannually, based on your revenue, through the Danish Tax Agency’s online portal.

In this blog, you’ll find a simple breakdown of who needs to file, how often, key deadlines, filing steps, and tips to avoid common VAT mistakes in Denmark.

What is a VAT Return in Denmark?

VAT returns Denmark are digital reports submitted to the Danish Tax Agency (SKAT), where businesses declare the VAT collected on sales and the VAT paid on purchases. These filings determine whether your business owes VAT to the state or qualifies for a refund. Submitting accurate VAT returns Denmark on time isn’t just a best practice, but a legal requirement.

All VAT returns in Denmark must be filed online through the TastSelv Erhverv portal and follow the country’s bookkeeping standards. Depending on your company’s annual revenue, returns are submitted monthly, quarterly, or biannually. Staying compliant means keeping detailed records, understanding local VAT regulations, and adhering to the reporting schedule applicable to your business.

Current VAT Rates in Denmark

Denmark applies a flat standard VAT rate of 25%, which covers nearly all goods and services sold within the country. Unlike many EU member states, Denmark does not offer any reduced VAT rates for categories like food, books, or public transportation. This uniform rate simplifies compliance but also places Denmark among the countries with the highest VAT rates in Europe.

That said, there are instances where a zero-rated VAT applies. This is mostly limited to exports outside the EU and specific international services. In these cases, VAT is charged at 0%, allowing businesses to recover input VAT without charging it to the customer. Understanding these VAT rules is essential if you’re operating in Denmark or dealing with Danish customers, especially when it comes to pricing, invoicing, and reporting obligations.

Who Needs to Register For VAT in Denmark?

Any business that supplies goods or services in Denmark and reaches a certain annual turnover must register for VAT. The threshold for mandatory registration is DKK 50,000 (roughly €6,700) over a 12-month period. Once your business crosses this limit, VAT registration becomes compulsory, and you must start submitting VAT returns in Denmark.

This applies not only to Danish businesses but also to foreign companies selling in Denmark, whether you provide digital services, run an online store, or ship physical goods. Non-EU businesses often need a fiscal representative to handle VAT tax filing in Denmark, especially when importing goods or managing local transactions.

How Often Must VAT Returns Be Filed in Denmark?

The frequency of VAT returns in Denmark depends on your business’s annual turnover. These are the official VAT reporting requirements in Denmark set by the Danish Tax Agency:

• Monthly: For businesses with an annual turnover above DKK 50 million
• Quarterly: For businesses with turnover between DKK 5 million and DKK 50 million
• Biannually (every 6 months): For businesses with turnover below DKK 5 million

All returns must be filed electronically through the TastSelv Erhverv portal. It’s essential to know your filing frequency, as it determines your deadlines for VAT tax filing Denmark. Filing late or incorrectly can lead to penalties, so make sure your records are in order and you’re aligned with the right schedule.

VAT Return Deadlines in Denmark

Denmark VAT return deadlines depend on your annual turnover. The higher the revenue, the more frequently you need to submit. Below are the standard filing requirements and deadlines for VAT returns Denmark:

How to File VAT Returns in Denmark?

Filing VAT returns Denmark is a digital process handled through the Danish Tax Agency’s online system. Here’s a step-by-step guide to help you stay compliant:

1. Log in to TastSelv Erhverv:  Visit skat.dk and log in to the TastSelv Erhverv portal using your business’s NemID or MitID.
2. Select ‘Moms’ (VAT) Section: Once inside the portal, navigate to the VAT section to start your VAT tax filing in Denmark.
3. Enter VAT Figures: Input the VAT you’ve collected on sales and the VAT paid on business expenses. Make sure your figures reflect the correct VAT rates in Denmark (typically 25%).
4. Upload Supporting Documents (if required): Keep records of invoices, receipts, and bookkeeping entries. While you may not need to upload them during filing, you must retain them in case of an audit.
5. Review and Submit: Double-check all entries for accuracy. Submit the return electronically. You’ll receive confirmation once it’s accepted.
6. Make the Payment: If you owe VAT, make the payment by the due date using the bank details provided in the portal.

Filing must be completed by your assigned deadline, monthly, quarterly, or biannually, based on your turnover. Staying on schedule with VAT tax filing Denmark helps avoid penalties and ensures your business remains in good standing.

Commenda simplifies how to file the VAT returns Denmark process by managing the entire process, from data preparation to on-time submission through expert local support.

VAT Invoicing Requirements in Denmark

To stay compliant with Denmark VAT rules, all VAT-registered businesses must issue invoices that meet specific legal requirements. Accurate invoicing is not just about good bookkeeping, but it’s a key part of meeting VAT compliance Denmark. 

Each invoice must include the following details:

• The word “Invoice” clearly stated
• A unique, sequential invoice number
• Issue date of the invoice
• Seller’s full name, address, and VAT number
• Buyer’s name and address (if applicable)
• Description of goods or services provided
• Quantity and unit price of goods/services
• VAT rate applied (usually 25%) and the total VAT amount
• Total invoice amount including VAT
• Date of supply (if different from the invoice date)

What VAT Can Businesses Deduct in Denmark?

If your business is VAT-registered, you can usually deduct VAT on goods and services directly used for your operations or resale. This is a key part of VAT compliance Denmark and helps reduce your tax burden through accurate VAT reporting in Denmark.

Deductible VAT often applies to:

• Business premises and utilities, including rent (if VAT is charged), heating, electricity, and water.
• Office essentials like furniture, equipment, mobile phones, landlines, and supplies.
• Workwear and safety gear that is strictly for business use.
• Services such as accounting, cleaning, and advertising.
• Machinery, tools, and vehicles used in daily business activities (with special rules for vehicles).
• Trade publications and technical literature relevant to your business.
• Food, accommodation, and energy, though these have special deduction rules.

To claim input VAT, keep valid invoices that show your VAT number and the correct breakdown. These must be stored for at least five years to meet audit and Denmark VAT reporting requirements.

How to Recover VAT Credits and Refunds in Denmark?

If your input VAT exceeds your output VAT in a given period, your business is eligible for a VAT refund. This is a common scenario for exporters, new businesses, or those with high operational expenses. Recovering VAT credits is part of routine Denmark VAT compliance, handled through the same portal used for VAT reporting in Denmark.

The refund process is straightforward:

1. File your VAT return via the TastSelv Erhverv portal. If the return shows a negative VAT balance, the system automatically flags it for refund.
2. Ensure your bank details are updated in the portal to receive the refund.
3. Keep all documentation, including invoices, receipts, and financial records, for at least five years. SKAT may request additional information before releasing the refund.

Most refunds are processed within three to six weeks, but delays can occur if the return is incomplete or flagged for review.

To speed up your VAT refund:

• Double-check your entries before submitting
• Submit returns well before the deadline
• Respond promptly to any inquiries from SKAT

VAT on Imports and Exports in Denmark

In Denmark, VAT rules for international trade depend on what you’re selling, who you’re trading with, and whether the transaction is within the EU or with non-EU countries. For imports, businesses must calculate and pay Danish VAT at the standard 25% rate, even if the supplier has already charged foreign VAT. This VAT can usually be reclaimed through your VAT returns Denmark process, provided the purchase supports taxable business activities.

When exporting, VAT treatment varies. Sales to EU businesses are usually VAT-exempt under the reverse charge rule, while exports to non-EU countries are zero-rated. However, detailed reporting to SKAT is required in both cases. Sales to private individuals in the EU typically remain subject to Danish VAT.

You must register as an importer/exporter at virk.dk for trade outside the EU and report all cross-border transactions via the TastSelv Erhverv portal. For full Denmark VAT compliance, ensure that you maintain accurate records, submit timely filings, and provide complete documentation in your VAT returns.

Reverse Charge Mechanism for VAT in Denmark

The reverse charge mechanism shifts the responsibility for reporting VAT from the seller to the buyer. In Denmark, this rule mainly applies when a Danish business purchases goods or services from a supplier in another EU country or a non-EU supplier that doesn’t have a Danish VAT registration.

Under this rule, the buyer must calculate both the output VAT and input VAT on the same transaction, reporting it through their VAT tax filing in Denmark. This means no VAT is charged on the invoice by the foreign supplier, but the Danish buyer accounts for the VAT as if they had sold the goods or services themselves.

The reverse charge also applies in specific domestic situations, such as subcontracting in the construction sector or the sale of certain electronic goods between Danish VAT-registered companies.

Digital Services and VAT Obligations in Denmark

If your business sells digital products or services like e-books, streaming, online courses, or software downloads to customers in Denmark, you must follow local Denmark VAT compliance rules. Digital services are taxed at the standard 25% VAT rate, regardless of whether you’re based inside or outside the EU.

When selling to private individuals in Denmark, you are required to register for VAT in Denmark and charge Danish VAT on each sale. For business-to-business (B2B) sales, the reverse charge mechanism usually applies, meaning the Danish buyer accounts for the VAT.

Foreign sellers can register through the One-Stop Shop (OSS) or Non-Union OSS to simplify VAT obligations across EU countries. 

Common VAT Compliance Mistakes to Avoid in Denmark

Staying on top of VAT compliance in Denmark means more than just filing returns, it’s about getting the details right. Many businesses make small but costly errors that can lead to penalties or trigger audits by the Danish Tax Agency.

Here are some of the most common mistakes to avoid:

• Filing VAT returns in Denmark late or missing reporting deadlines
• Using incorrect VAT rates, especially on exports or digital services
• Skipping reverse charge reporting on EU and non-EU B2B purchases
• Issuing incomplete invoices without required VAT details
• Failing to register once you cross the threshold

Stay accurate with your VAT tax filing in Denmark, keep records for five years, and always review guidance on skat.dk to stay compliant.

VAT Penalties and Compliance Risks in Denmark

Maintaining accurate VAT returns in Denmark is essential to avoid penalties and stay on the right side of tax laws. The Danish Tax Agency (SKAT) enforces strict rules, and non-compliance, whether through delays, errors, or missing filings, can lead to serious consequences.

Common penalties and risks include:

• Daily fines for late filing of VAT returns
• Interest charges on unpaid or underreported VAT
• Administrative penalties for incorrect or incomplete VAT data
• Audit risk if errors are frequent or unexplained
• Loss of VAT refund eligibility due to missing documentation

Simplify your VAT Registration and Filing in Denmark with Commenda

Understanding and managing VAT compliance in Denmark is essential for any business operating in or trading with the country. This blog covered key areas including VAT registration rules, VAT returns Denmark, filing deadlines, input VAT deductions, international trade obligations, and common compliance mistakes.

Commenda takes the complexity out of Danish VAT. From registering your business for VAT to preparing and filing accurate VAT in Denmark, our team handles it all. We stay up to date with the latest compliance requirements, ensuring your filings are accurate, on time, and audit-ready. Whether you’re a local startup or an international seller, Commenda offers tailored solutions to keep your business VAT-compliant.

Ready to make VAT simple? Schedule a demo with Commenda and see how we can streamline your VAT tax filing in Denmark.

FAQs 

Q. What is VAT, and why do I need to file VAT returns in Denmark?

VAT (moms) is a consumption tax on goods and services in Denmark. Businesses must file returns to report VAT collected and paid.

Q. How often do I need to submit my VAT returns in Denmark, and what is the deadline?

Depending on turnover, VAT returns are due monthly, quarterly, or biannually. Deadlines are typically the 1st of the second month after the period ends.

Q. What happens if I miss the VAT return deadline in Denmark?

You may face penalties and interest for late submission or payment. SKAT (Danish Tax Agency) will also send reminders.

Q. How do I calculate the VAT I owe or the refund I’m entitled to in Denmark?

Subtract VAT paid on purchases (input VAT) from VAT collected on sales (output VAT). The result is the amount payable or refundable.

Q. What should I do if I make an error on my VAT return in Denmark? 

You can correct the error in your next VAT return or by contacting SKAT. Significant mistakes should be reported as soon as possible.

Q. Can I claim VAT refunds on business expenses in Denmark?

Yes, VAT on eligible business-related expenses can be reclaimed. Proper documentation and receipts are required.

Q. What records do I need to keep for VAT purposes in Denmark?

Keep invoices, receipts, accounting records, and VAT reports for at least 5 years. Digital records are acceptable if accurate and accessible.

Q. Do I need to register for VAT in Denmark if my business is based outside of Denmark?

Yes, if you sell goods or services in Denmark, VAT registration is usually required. Thresholds and rules vary for EU and non-EU businesses.

Q. Are there any penalties for submitting inaccurate VAT returns in Denmark?

Yes, inaccurate returns can lead to fines or audits. Intentional fraud may result in higher penalties or legal action.

Q. How can I file my VAT returns in Denmark (online/offline options)?

VAT returns are filed online via SKAT’s TastSelv Erhverv portal. Offline filing is generally not accepted.