VAT and Sales Tax in Denmark

Denmark's value-added tax is called moms (mervaerdiafgift) and is administered by Skattestyrelsen (the Danish Tax Agency). It is governed by Momsloven -- the Danish VAT Act -- which transposes EU VAT Directive 2006/112/EC into domestic law.

Why does Denmark have only one VAT rate?

Denmark is one of the few EU member states to use a single standard rate of 25% across nearly all taxable supplies. Unlike Sweden (25%/12%/6%), Germany (19%/7%), or France (20%/10%/5.5%/2.1%), Denmark has no reduced rate bands for food, medicine, books, or transport. This was a deliberate policy choice at the time of EU VAT-rate harmonisation in 1992: simplicity of administration and avoidance of boundary disputes between rate categories were prioritised over rate differentiation. Businesses operating in Denmark therefore do not need to classify supplies into multiple rate tiers, which reduces compliance complexity considerably. [Source 1, Source 2]

The key distinctions beneath the single 25% rate are between zero-rated supplies (taxed at 0%, but the seller retains the right to deduct input VAT) and exempt supplies (no VAT charged and no input VAT deduction). Exports of goods outside the EU, intra-EU supplies to VAT-registered buyers, newspapers published more than once per month, and international passenger transport are zero-rated under sections 34-36 of Momsloven. Healthcare, education, financial and insurance services, and residential property rental are exempt -- meaning providers in those sectors cannot recover input VAT on their costs. That distinction matters practically: a hospital or a bank bears irrecoverable VAT on its own purchases, whereas an exporter gets full input-VAT recovery.

Who must register for moms in Denmark?

Registration with Skattestyrelsen via virk.dk is mandatory once annual taxable turnover exceeds DKK 50,000 (approximately EUR 6,700) measured over any rolling 12-month period. [Source 1] This threshold is low by EU standards -- Germany's threshold is EUR 25,000, the UK's is GBP 90,000 -- meaning that small freelancers, sole traders, and part-time service providers frequently trigger mandatory registration. Foreign businesses with no establishment in Denmark face the same DKK 50,000 threshold; non-EU businesses must additionally appoint a Danish fiscal representative who assumes joint and several liability for the VAT debt.

Voluntary registration below the threshold is permitted and is attractive to startups with significant input-VAT costs on equipment or cloud infrastructure, or to exporters making zero-rated intra-EU supplies who wish to reclaim input VAT from day one. Once registered, a business receives a CVR-number (Central Business Register number) that doubles as its VAT identification number in the format DK + 8 digits.

After registration, filing is an ongoing obligation even in periods with zero sales: a nulindberetning (zero declaration) must be submitted before the deadline. Missing a deadline triggers an automatic DKK 800 fine plus 0.7% monthly interest on any underpaid amount.

How are moms returns filed and when are they due?

The filing frequency depends on annual VAT-taxable turnover: [Source 3]

• Half-yearly (halvaarsafregning): turnover below DKK 5 million. Deadlines: 1 September (covering January-June) and 1 March (covering July-December).
• Quarterly (kvartalsmoms): turnover between DKK 5 million and DKK 50 million. Deadlines: 1 June, 1 September, 1 December, and 1 March.
• Monthly (maanedsmoms): turnover above DKK 50 million. Deadline: 25th of the following month.

All returns are filed electronically through TastSelv Erhverv, Skattestyrelsen's online business portal. The return shows output VAT on sales less input VAT on purchases; if input VAT exceeds output VAT the surplus is refunded, typically within 30 days of the return being processed.

How does the reverse charge work in Denmark?

Denmark applies the reverse charge (omvendt betalingspligt) in two main situations. First, for cross-border B2B services supplied by a foreign business to a Danish VAT-registered recipient: the Danish business self-accounts the VAT on its own return rather than the foreign supplier charging it. This follows the EU general place-of-supply rule for services under Article 44 of the VAT Directive. Second, for specific domestic categories introduced to combat VAT fraud: emission allowances, scrap metal, and wholesale supplies of mobile phones and computer chips. In both cases the supplier issues a VAT-free invoice noting the reverse charge; the recipient declares both the output and input VAT in the same return period, producing a cash-flow-neutral position for fully-deductible purchases.

What is the EU One Stop Shop (OSS) and when does it apply?

For Danish businesses making B2C distance sales of goods or digital services to consumers in other EU member states, once total cross-border B2C turnover exceeds EUR 10,000 per calendar year, VAT is due in each consumer's country -- not in Denmark. Rather than registering for VAT separately in every EU member state, businesses can register for the Union Scheme of the VAT One Stop Shop via TastSelv Erhverv and submit a single quarterly OSS return covering all EU-wide B2C sales, with Skattestyrelsen distributing the VAT to the destination countries. [Source 4]

Non-EU businesses supplying digital services to EU consumers can register under the Non-Union Scheme in any EU member state. Low-value imports (goods valued at EUR 150 or below shipped from outside the EU) can use the Import Scheme (IOSS). Below the EUR 10,000 threshold, Danish VAT at 25% applies throughout.

What are the digital bookkeeping requirements?

Under Denmark's Bookkeeping Act (Bogforingsloven, in force from 2022), companies are required to use a certified digital bookkeeping system. The rollout is phased by company size: [Source 5]

• From July 2024: Medium and large companies using commercially registered bookkeeping software must comply.
• From January 2025: All medium and large companies, including those using custom-built accounting software.
• From January 2026: Small businesses with net turnover exceeding DKK 300,000 in each of the two preceding years (i.e. 2024 and 2025) must use a certified digital system.

Certified systems must be able to generate a SAF-T file (Standard Audit File for Tax, OECD standard) on demand for submission to Skattestyrelsen or the Danish Business Authority. Currently only the Header section of the SAF-T file is mandatory; transactional data sections are expected to become compulsory as the standard matures. Systems must also support e-invoicing in OIOUBL or Peppol BIS 3.0 formats and retain records digitally for a minimum of five years. Non-compliance can result in fines of up to DKK 1.5 million.

For more detail on the full Danish tax landscape, see the Denmark country overview. For personalised guidance on moms registration, cross-border compliance, or OSS setup, consult a qualified tax professional listed in the TaxPros Rated Denmark directory.