Understanding VAT and Tax Registration in Denmark

Understanding VAT and Tax Registration in Denmark

Value-added tax (VAT), known as MOMS in Danish, is one of the first tax considerations when launching a business. Denmark’s VAT system might seem daunting, but once you know the basics – registration thresholds, how to register, rates, and filing deadlines – it becomes manageable. This guide breaks down what international founders need to know about VAT and related tax registrations.

When Do You Need to Register for VAT?

Not every small business needs to register for VAT immediately. Denmark has a DKK 50,000 sales threshold before VAT registration becomes mandatory. In practical terms, if you expect your business to sell more than 50,000 kr. worth of goods or services in a calendar year, you must register for VAT^skat.dk. This is roughly €6,700 (though always check current exchange rates).

A few key points on the threshold:

• The 50,000 kr. limit is cumulative over a calendar year (January to December)^skat.dk. Previously it was measured on a rolling 12-month basis, but as of 2025 it’s aligned to calendar years. So if you start your business mid-year, monitor your sales – hitting 50k in that same calendar year triggers the requirement.
• If you exceed 50,000 kr. without registering, you could be liable for the VAT you should have charged on those sales and may face a fine^dinero.dk. For example, exceeding the threshold by selling 50,000 kr. means about 12,500 kr. in VAT (25%) would be owed, and you’d have to pay that out of pocket since you didn’t collect it from customers^dinero.dk. It’s important to register on time to avoid this scenario.
• Voluntary registration: You don’t have to wait until you cross 50k to register. If you’re serious about your business or have up-front investments, it can make sense to register for VAT from the start. Being VAT-registered means you charge 25% on your sales, but also that you can reclaim VAT on your business purchases. Many startups register early to get VAT refunds on setup costs. If you stay under 50k, that’s fine – you can remain registered (you’ll just file “zero” sales, which is common for new businesses).

How to Register for VAT (MOMS)

Registering for VAT in Denmark is done through the Danish Business Authority (Erhvervsstyrelsen). Here’s how:

• New companies: When you register your company on Virk.dk (the online business registration portal), there’s an option to add VAT registration as part of the process^skat.dk. If you know you need VAT (or choose it voluntarily), you can handle it in one go during company formation.
• Existing companies: If you already have a CVR number (business registration) and later need to add VAT, you can log into Virk.dk and select the “Register VAT” service. You’ll need a MitID/NemID login tied to the business. Follow the guided steps, and the system will update your registrations. Approval is usually quick – often immediate or within a day or two.
• No Danish eID? If you don’t have a Danish MitID (for example, foreign owners without CPR), you can still register for VAT by filling out a form and emailing the authorities^{businessindenmark.virk.dk}. The form “Start 40.112” is used to register a company (including VAT) for entities without access to the online system^{businessindenmark.virk.dk}. This might take a bit longer, so plan accordingly.

Once registered, your company gets a VAT number (which is just your CVR number with “MOMS” status). You must then add 25% VAT to your sales in Denmark (with some exceptions for zero-rated or exempt goods/services, though most typical services have 25%). The standard VAT rate in Denmark is 25% on almost all goods and services, with no lower reduced rates – Denmark keeps it simple with a single high rate.

What is MOMS and How Does it Work?

MOMS is just the Danish term for VAT. At 25%, it’s one of the higher VAT rates in Europe, reflecting Denmark’s model of funding extensive public services. Here’s how it works in practice for your business:

• Charging VAT: Once registered, you add 25% to your invoice totals for sales to Danish customers. For example, if your service costs 1,000 kr., the invoice would be 1,250 kr. including moms (where 250 kr. is VAT you’ll later remit to the tax authorities). Business customers can often deduct this, whereas private consumers bear the cost.
• Collecting and Reporting: The VAT you add on sales is output VAT – this is not yours to keep; you’re holding it on behalf of the state. However, you’ll also pay VAT on most things you buy for the business (equipment, inventory, etc.), which is input VAT. When you file your VAT return, you subtract input VAT from output VAT. You pay the net difference to SKAT (the Danish Tax Agency). If your input VAT exceeds output (for example, you had startup costs but little sales), you get a refund from SKAT.
• Examples: If in a quarter you collected 20,000 kr. in VAT from sales and paid 5,000 kr. in VAT on business purchases, you’d owe 15,000 kr. to SKAT. If you collected 5,000 but paid 8,000 (maybe you bought a lot of equipment), you’d get a 3,000 kr. refund after filing.

Filing VAT: Frequency and Deadlines

How often you need to file VAT returns in Denmark depends on your company’s turnover. All new companies are usually set to quarterly filing by default^dinero.dk. As your business grows, the Tax Agency may adjust your filing frequency:

• Quarterly (4 times a year): This is typical for small and new businesses. You file every calendar quarter. The deadlines are usually on the 1st of the second month after the quarter ends. For instance, Q1 (Jan–Mar) is due by May 1, Q2 (Apr–Jun) by Aug 1, Q3 by Nov 1, and Q4 by Feb 1. (If the 1st falls on a weekend/holiday, the deadline moves to the next working day.)
• Monthly: If your revenue grows beyond a threshold (currently around DKK 5 million annually), authorities will switch you to monthly reporting. This means more frequent paperwork – a VAT return every month, typically due by the 25th of the following month (e.g., January’s VAT due Feb 25). Very large companies (over DKK 50 million) are always monthly filers.
• Semi-annual (2 times a year): A few very small businesses might be allowed to file every six months (especially if their revenue is under a certain low limit). However, recent rule changes mean most new businesses won’t use this option initially^dinero.dk. Don’t worry about this unless the Danish Tax Agency specifically places you on semi-annual reporting.

Never miss a deadline. VAT deadlines are strict. If you file late, even by a day, you can incur a fine (a typical fine is 800 DKK for each late report, and it increases if you’re later). Repeated lateness can even cause SKAT to put you on “forced monthly” VAT reporting as a penalty^dinero.dk – meaning you lose the privilege of quarterly filing and must file every month for a period of time. Always file on time even if you had no sales; in that case you submit a zero return (a nulindberetning in Danish)^skat.dk. It’s free and easy to file zero – but not filing at all triggers automated fines.

Understanding SKAT and Tax Registration

SKAT is the Danish Tax Authority (under the agency name “Skattestyrelsen”). When you register your business, aside from VAT, you should be aware of other tax registrations:

• Corporate Tax Registration: If you set up an ApS or other company, it will automatically be registered for corporate income tax. There’s no separate action needed at start – you’ll report your profits annually through the corporate tax return (due by June 30 of the following year for calendar-year companies).
• Employer Registration (A-Skat): If you plan to hire employees (including paying yourself a salary from your ApS), you must register as an employer with SKAT. This enables you to withhold A-skat (income tax) and AM-bidrag (labour market contribution) from wages. It’s important to do this before you pay any salaries, so that the withholdings are reported correctly. (More on A-skat and AM-bidrag in a later post about payroll.)
• Import/Export (EORI): If you will be importing or exporting goods outside the EU, you might need an EORI number – this is separate from VAT, for customs purposes. Check with SKAT if it applies to your business.

All these registrations can be managed via the Virk.dk portal. After your initial business setup, use the TastSelv Erhverv online system (the business self-service for taxes) to keep track of VAT filings, payroll tax filings, and so on.

Bottom line: Stay on top of VAT from day one. Know the 50k threshold, register in advance if needed, and set reminders for your quarterly (or monthly) deadlines. It’s routine once you get the hang of it. If you need assistance with VAT registration or compliance in Denmark, we can guide you through the process.

Confused about VAT or unsure how to get your business registered for taxes in Denmark? Our team is here to help international entrepreneurs with all the paperwork and rules. Contact us for hands-on assistance or book a free call to discuss how we can make your Danish VAT and tax setup easy.

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