Denmark VAT (Moms) System: A Guide for Foreign Investors (2025)

Standard VAT Rate:

VAT Registration:

• Businesses must register for VAT with the Danish Tax Agency (Skattestyrelsen) if their taxable turnover exceeds a certain threshold.
• Foreign businesses conducting taxable activities in Denmark are also required to register.
• Even if the threshold is not met, voluntary VAT registration is possible.

Reduced VAT Rates and Exemptions:

• While the 25% rate is standard, certain goods and services are exempt from VAT or subject to reduced rates.

• Examples of exemptions include:
• Certain financial services
• Healthcare services
• Educational services

Reverse Charge Mechanism:

• Denmark applies the reverse charge mechanism for certain transactions, where the recipient of the goods or services is liable to account for the VAT.
• This is common in cross-border transactions and certain business-to-business (B2B) services.

VAT Returns and Payment:

• Businesses must file VAT returns periodically (monthly, quarterly, or annually), depending on their turnover.
• VAT payments are due by the deadlines specified by the Danish Tax Agency.
• The Danish Tax Agency provides a very effective digital platform for the filing of VAT returns.

VAT Refunds:

• Foreign businesses that are not established in Denmark but have incurred VAT on eligible expenses can claim VAT refunds.
• The refund process is subject to specific rules and deadlines.
• Denmark is very good at paying VAT refunds.

Intrastat Reporting:

• Businesses engaged in trade of goods with other EU member states must comply with Intrastat reporting requirements.

Important Considerations for Foreign Investors:

VAT Registration Obligations:

• Determine your VAT registration obligations based on your business activities in Denmark.

Accurate Record-Keeping:

• Maintain accurate and complete records of all VAT transactions.

Compliance with Deadlines:

• Ensure timely filing of VAT returns and payment of VAT.

VAT Refund Process:

• Understand the requirements and deadlines for claiming VAT refunds.

Professional Advice

• Seek professional VAT advice to ensure compliance and avoid penalties.

Digitalization:

• The danish VAT system is highly digitalized, and therefore it is very important to be ready to handle digital paperwork.

• The Danish VAT system is well-organized and efficient.
• Compliance is essential to avoid penalties.
• It is very important to use the digital services provided by the Danish Tax agency.