VAT Guide
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In this VAT Guide, you can read about general VAT topics.
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We will be happy to answer any questions regarding the Danish VAT system.
Please contact us at julie@willert.dk / +45 22 20 21 09.
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VAT rates in Denmark
The current VAT rate in Denmark is 25 %.
Newspapers, taxi, bus, train and flight tickets are VAT exempt.
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VAT Recovery
In Denmark you can recover VAT on certain business costs as for example exhibitions, admission to events and conferences, accommodation, meals (only 25 % of the VAT refundable), advertising and marketing costs, goods and services.
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The input VAT on purchases in connection with organizing an event in Denmark can be recovered.
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VAT invoice requirements
An invoice must contain invoice number (sequential), date of issue, name, address and registration number of the supplier, name, and address of the customer, a clear description of the goods or services and the VAT rate and VAT base.
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The total amount of the Danish VAT must be shown on the invoice in Danish kroner (DKK) or in EUR. Other amounts can be expressed in any currency. Where there is an exemption involved or where the customer is liable to report the VAT, the invoice must contain an indication that the supply is VAT exempt or subject to the reverse charge procedure.
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VAT deadlines
Check the VAT return deadlines determined by the Danish authorities here.
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Intra-community supply of goods
When goods are sold and delivered to another EU VAT registered company the reverse charge applies. To zero-rate the invoice you must make sure that the customer’s VAT number is valid. The number can be verified on the European online VIES system.
When the Reverse Charge applies, the recipient of the goods makes the declaration of both their purchase (input VAT) and the supplier’s sale (output VAT) in their VAT return. This way, the two entries cancel each other on the VAT return.
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Intra-community supply of services (Reverse charge)
According to EU VAT rules, several types of services are liable to reverse charge. As a main rule VAT liability in relation to B2B services is where the customer is located. To zero-rate the invoice you must make sure that the customer’s VAT number is valid. The number can be verified on the European online VIES system.
The supply of certain services, for example, services related to immovable property and admission to events still operates under the ‘Special Rule’, and the place of supply is where the service or event takes place.
When reverse charge applies, the recipient of the services makes the declaration of both their purchase (input VAT) and the supplier’s sale (output VAT) in their VAT return. In this way, the two entries cancel each other on the VAT return.
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Supply of installation services
Reverse charge applies to installation supplies such as placing, installing, integration and assembling by foreign companies to customers registered for VAT in Denmark. The Danish customer will be liable for the VAT. For that reason, foreign suppliers generally do not have to register for VAT in Denmark when supplying installation services to Danish VAT registered businesses.
If the installation supplies are provided to a non-registered Danish customer the foreign supplier is obliged to register for VAT in Denmark and to charge and report Danish VAT on the supplies.
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Tour operator’s margin scheme (TOMS)
Businesses that buy and sell accommodation or other travel services to their customers in their own name may fall within the TOMS scheme where VAT is declared on the profit margin only.
Businesses falling within this scheme cannot recover any input VAT on costs that directly relate to the package, such as hotel, restaurant, and transportation because the business does not charge VAT on its own supply, but on the profit margin only.
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Triangulation
The EU simplification measures for triangulation transactions have been adopted in Denmark. Triangulation occurs when there are three companies involved in successive transactions, with a single movement of goods, and they are VAT registered in three different EU member states.
Therefore intra-community acquisitions made by a middleman are not liable to Danish VAT if Denmark is the country of arrival, given that the middleman (party B in an ABC transaction) is not VAT registered in Denmark and holds a VAT number in another member state and that goods are moved directly from party A to party C.
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Electronic and digital services
B2C
Following rule changes, many B2C supplies made digitally are now subject to local VAT in the customer’s location. Suppliers will generally need an EU registration to be able to account for the VAT due.
You file a MOSS VAT return through the relevant electronic VAT portal.
MOSS is short for Mini One Stop Shop - and means that you only need one registration which will cover all the local EU registrations required.
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The new rules implemented in 2015 apply to telecoms, broadcast and electronic services supplied within the EU to consumers.
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B2B
The place of supply for electronically supplied B2B services within the EU is where the recipient is established. The rules provide that the place of supply is the place where the customer has established its business. The reverse charge rule applies, under which the customer must account for the VAT.
To zero-rate the invoice you must make sure that the customer’s VAT number is valid. The number can be verified on the European online VIES system.
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VAT on events
When organizing an event, conference or exhibition in another EU country, an obligation for VAT registration in that particular country can arise. Many services relating to an event will not have VAT consequences, but admission is an exception to the rule – it is subject to VAT in the country where the event takes place. So if you organize an event in Denmark with paying attendees you must VAT register, charge Danish VAT and file relevant declarations.
The VAT incurred when organizing an event abroad can often be recovered e.g. on expenses such as rental of venue, accommodation, catering, and expenses incurred by your staff.
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If you organized or hosted an event in Denmark without obligation to register for VAT in Denmark, you can still reclaim the VAT on most of your expenses in relations to the event. This also applies if your employees attended an event held in Denmark and paid Danish VAT for the admission.