VAT registration in Denmark

Denmark

Often voted the world's happiest country, with its idyllic scenery of golden fields and a bright blue sky, as well as being the birthplace of one of the world's most renowned fairy tale writers, H.C. Andersen.

Denmark has one of the world's highest tax burdens and prides itself on being a pioneer, which means that Denmark was also one of the first countries to implement a general value-added tax. What we call VAT in today's Denmark.

Despite the high taxes and duties, Danes remain one of the most affluent nations, mastering multiple languages and fully embracing digitisation, making Denmark an attractive market.

When is there generally a place of VAT taxation in Denmark?

Sales of goods located in Denmark at the time of sale, as well as imports of goods from third countries or acquisitions of goods from other EU countries for the company's own use or in its own name, have a place of VAT taxation in Denmark.

Sales of services to businesses (B2B) are generally subject to the "reverse charge" rules, which means that the buyer must account for the VAT to the authorities in their own country. Services related to immovable property have a place of VAT taxation here if the immovable property is located here – however, it is the business buyer who must pay the VAT – meaning that a foreign buyer of a service related to immovable property in Denmark must be VAT registered here to account for the "reverse charge" VAT.

Sales of services related to access to art, culture, sports, science, education, or entertainment, as well as rental of means of transport, have a place of VAT taxation in Denmark. Services related to hotel stays, restaurant visits, etc., also require the collection of Danish VAT if the service takes place in Denmark.

Sales of goods and services (including electronically supplied services) to private individuals generally have a place of VAT taxation in Denmark if the individual is resident here. It is possible to have only one VAT registration in the EU for sales to private individuals in all EU countries -> either a One-Stop-Shop registration or an Import-One-Stop-Shop registration.

When should you register for VAT in Denmark?

Your company must register for VAT in Denmark if your turnover with VAT liable transactions here exceeds the registration threshold of DKK 50,000.

Companies from other EU countries, as well as from Norway and (for now) from the United Kingdom, do not need to appoint a fiscal representative in Denmark to be VAT registered. However, if there is a need to register as an importer of goods from a third country (e.g., goods from Norway or the UK), the company must still use a fiscal representative in Denmark.

Companies from countries outside the EU other than Norway and the UK must also appoint a fiscal representative to be VAT registered in Denmark.

At IntraVAT, we can serve as both your new fiscal representative, and as always, we can be your regular representative/agent to handle your registration and submission of VAT returns to the Danish authorities.

In Denmark, you are required to submit your application for VAT registration no later than 8 days after you have commenced your VAT liable activity. It is possible to register for VAT in Denmark even if your company has not reached the registration threshold of DKK 50,000. The standard VAT rate is 25%, and reduced VAT rates are generally not applied in Denmark.

The following documents are required for VAT registration in Denmark:

Information about the nature and scope of the company's intended sales in Denmark
A completed application form - including name and address, VAT number if applicable in the home country, and information about the owner's identity (along with a copy of their ID card or passport)
A copy of the company's registration certificate from the relevant authority in the home country
Information about the name and address of the fiscal representative

Initially, VAT must be reported quarterly in Denmark (monthly if the expected turnover exceeds DKK 50 million/year), and it is always possible to request monthly reporting if desired.

As a rule, import VAT and customs duties must be paid at the border when importing goods from a third country to Denmark. However, once the company has been registered as an importer, import VAT no longer needs to be paid at the border but on the same VAT return where the import VAT is deducted as input VAT. Thus, import VAT has no liquidity impact for companies registered in Denmark.

Denmark is also a pleasant country to pay customs duties in because all companies (after credit assessment) can obtain a customs credit against security.

Deadlines

VAT rates as per 2023

*Payroll Tax