Danish VAT rates and VAT compliance

Danish VAT rates

Foreign businesses must charge Danish VAT rates if they are VAT registered in Denmark.  Failure to do so will leave the company liable to any under collected VAT.  The framework for the rates is set by the EU (e.g. the minimum VAT rate must be above 15%).  However, Denmark is free to determine the higher, standard rate, and most of the reduced rates.

The current rates are:

Danish VAT rates

Rate Type Which goods or services
25% Standard All taxable goods and services.
0% Zero Newspapers and journals (published more than once a month); intra-community and international transport.


Danish VAT compliance

For foreign companies VAT registered in Denmark as a non-resident trader, there are a number of rules to follow for the bookkeeping, charging and rates for VAT trading.   This includes:

  • Issuing invoices with the disclosure details outlined in the Danish VAT Act.
  • Correct invoicing of customers for goods or services in accordance with the Danish time of supply VAT rules.
  • Use of electronic invoices, and approvals by customers.
  • Maintenance of accounts and records, which must be held for at least seven years.
  • Processing of credit notes and other corrections.
  • Use of approved foreign currency rates.

What is the tax point for Danish VAT?

The tax point (time of supply) rules in Denmark determine when the VAT is due.  It is then payable to the tax authorities 10 days after the VAT reporting period end (monthly or quarterly).

For most goods, it is the time of delivery or passage of title.  For services, it is the completion of the service.

 

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