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Denmark

 

News & Tips

Full deduction for input VAT on hotel accommodation

From January 1st, 2015, Denmark is expected to adopt new legislation allowing full deduction of input VAT on hotel accommodation. The deduction will be increased from 75% to 100% where the expense is strictly related to the business taxable activities.


Register for foreign services

Foreign companies performing supply of services in Denmark are required to report these services to a register called RUT  [Register for foreign services].


VAT return - Periodicity

Every year in November, Danish VAT authorities assess if your settlement period is appropriate based on your VAT declarations for the period July 1st in the previous year to June 30th in the current year. You may apply for a shorter settlement period, e.g. half-yearly to quarterly. You cannot apply for a longer settlement period.


 More VAT News & Tips - Denmark

DOING BUSINESS IN DENMARK [DK] - VAT GUIDE

 

General

VAT Directive

Denmark

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

Danish VAT numbers have 10 characters [DK + 8 digits].

 

What is the local name of the tax?

 

Mervaerdiafgift [MOMS]

 

VAT rate

VAT Directive

Denmark

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Denmark applies a standard VAT rate of 25% and no reduced rates.

 

See VAT rates applied in the EU.  

VAT return

VAT Directive

Denmark

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Quarterly/Half-yearly

As from 1/1/2014, your company has to report its VAT position by filing periodical VAT returns either every month, every quarter or every six months depending on its turnover.

Your company has to declare VAT quarterly if you request it, or if Danish VAT authorities assess your business annual turnover subject to VAT to be DKK 5-50 million [€ 670.000 - € 6.700.000 ].

If your business is new, your company has to declare VAT quarterly for at least 18 months before Danish VAT authorities [SKAT] assess your business revenue and possibly change it, requiring you to declare VAT every six months.

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

For the year 2014, your company has to file VAT returns by electronic means via "E-tax" no later than June 2nd, 2014 (Q1), September 1st, 2014 (Q2), December 1st, 2014 (Q3) and March 2nd, 2015 (Q4) if your company has to declare VAT quarterly.

If you do not declare VAT on time, Danish VAT authorities may determine  VAT due based on an estimate. For this, they charge a fee of DKK 800. Despite the estimate, your company will always have to declare the actual VAT amounts for the period.

 

Statement

VAT Directive

Denmark

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

No

Your company is not required to file any summarizing annual VAT return in Denmark.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative Statement [ESL] must be drawn up for each calendar month. Quarterly reporting can be opted for under conditions.

Your company has to file ESL by electronic means  no later than the 25th day of the month after the end of the reporting period [month/quarter] to which it relates.

Payment

VAT Directive

Denmark

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The VAT due should be paid by the filing for the VAT return. If you do not pay on time, Danish VAT authorities will charge interest for late payment.

Are interim payments required?

Member States may require interim payment to be made.

Interim payments are not required.

VAT refund

VAT Directive

Denmark

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

 A VAT credit is not automatically carried forward to the next period. Refund is done immediately [generally within 21 days after you have declared VAT].

Special measures for foreign companies

VAT Directive

Denmark

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

No

Reverse charge is not applicable to major supplies of goods [except for supplies of goods with installation and other specific items].

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider.

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Yes

Reverse charge is applicable to major supplies of services [except for admission fee to event] provided the supplier is not established in Denmark [regardless whether VAT registered or not] and the recipient is a taxable person established in Denmark.

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

No

No simplification measures are available for consignment stock. Foreign taxpayers are therefore required to be registered for VAT purposes in Denmark.

 

Do special arrangements apply to "call-off-stock"?

 

No

No simplification measures are available for call-off-stock. Foreign taxpayers are therefore required to be registered for VAT purposes in Denmark.

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

No

 

VAT on import

VAT Directive

Denmark

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Yes

Denmark has introduced VAT warehousing regime.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

Yes

Postponed accounting via the VAT return is possible under specific conditions. A deferred payment for VAT and customs [similar delay] is also applicable.

 

Miscellaneous

VAT Directive

Denmark

Intrastat Threshold  

Dispatches: DKK 4.500.000

Arrivals : DKK 6.000.000

 

Distance Sales - Threshold  

DKK 280.000

See various thresholds applied in the EU

 

Ministry of Finance   website

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