VAT in Denmark

Denmark is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

As an EU member state, Denmark is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Denmark is not currently a member of the Eurozone and uses the Danish Krone (DKK) for its currency.  In Denmark VAT is known as: Omsaetningafgift, or MOMS.

VAT registration in Denmark

Both EU and non-EU businesses may trade in Denmark without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Denmark for the registration of non-resident traders, but you will need one to record transactions and your Danish customers will want proof that you have obtained one.

There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Danish VAT registration include:

• Importing goods into Denmark;
• Organising live events, conferences, etc. in Denmark;
• Holding goods in a warehouse in Denmark as stock for resale;
• Buying goods within Denmark that are subsequently re-sold in-country;
• Selling goods from Denmark to other EU member states;
• Distance-selling to private individuals in Denmark, e.g. internet retailing or trading through an e-commerce platform.

Registering for Danish VAT generally takes two weeks once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.

Danish VAT compliance

There are detailed rules controlling the recording and processing of xx transactions for VAT purposes. This includes guidelines on:

• Danish invoice requirements;
• When to issue a Danish tax invoice;
• Foreign currency reporting;
• Credit notes and corrections;
• Correcting entries from prior returns;
• Which accounting records must be maintained.

Danish VAT rates