VAT OBLIGATIONS IN DENMARK
How is the tax period determined in Denmark?
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 ).
Half-yearly settlement deadlines
You need to file a VAT return every six months if your annual revenue subject to VAT is less than DKK 5 million and if you have filed your VAT return and paid on time.
Quarterly settlement deadlines
You need to file a VAT return quarterly if your business is new, if you have requested quarterly settlement, or if Danish authorities assess your business's annual revenue subject to VAT to be DKK 5-50 million.
Monthly settlement deadlines
You need to file a VAT return monthly if your business's annual revenue subject to VAT is more than DKK 50 million, or if you have requested monthly settlement yourself.
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.
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?
Your company has to file VAT returns by electronic means via "E-tax".
The deadlines are determined as follows:
- 1st day of the 3rd month after the end of the quarter or half-year in case of the VAT returns are submitted on quarterly or half-yearly basis;
- 25th day of the month of the next month in case the VAT returns are submitted on a monthly basis.
If you do not declare VAT on time, Danish VAT authorities may determine VAT due based on an estimate. For this, they charge a penalty of DKK 800 and a reminder fee of DKK 65. Despite the estimate, your company will always have to declare the actual VAT amounts for the period.
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. 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.
Is this requirement laid down in the country and what is the filing deadline?
Your company is not required to file any summarizing annual VAT return in Denmark.
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.
Are quarterly filings allowed by the country and what is the filing deadline?
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.
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.
What is the payment deadline?
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?
Interim payments are not required.
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. Member States may require interim payment to be made.
Is any VAT credit automatically carried forward or refunded?
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).
VAT refund – Full deduction of VAT on hotel accommodation costs – 01/01/2015
From 01/01/2015, Danish VAT Act will allow full deduction of input VAT on hotel accommodation costs. The deduction will be increased from currently 75% to 100% where the expenses are strictly related to business taxable activities.
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.