Danish VAT (Moms): Complete Guide for Businesses

Value added tax — known to everyone in Denmark simply as moms — touches virtually every commercial transaction in the country. It is a consumption tax added to the price of most goods and services, collected at each stage of production and distribution, and passed on to the Danish Tax Agency, SKAT. If you run a business in Denmark, whether as a freelancer, a startup or an established company, moms is woven into how you price, invoice, file and trade. This guide walks through the essentials — the rates that apply, when registration becomes compulsory, the invoicing and filing rules, what you can reclaim, and how cross-border sales are handled.

The rates that apply

VAT is charged at each stage of the supply chain, but the economic burden falls on the final consumer — a business simply collects the tax from its customers, settles it with SKAT, and reclaims the VAT it has itself paid on business purchases. Denmark applies three main rates:

At 25%, the standard rate is among the highest in Europe, which is precisely why getting the rules right matters. The reduced rate of 7.5% covers groceries, but notably not restaurant meals, which stay at the full 25%. Exports and certain international services attract 0%, though zero-rated does not mean VAT-free in the accounting sense, as we will return to later.

Registering for VAT

Registration is compulsory once your annual turnover exceeds DKK 50,000. Turnover here means the total value of your sales excluding VAT, measured over a rolling 12-month period. It is a comparatively low threshold in European terms, so most businesses that trade at scale find themselves registered within their first year of operation.

Below the threshold, registration remains voluntary. That is not merely administrative tidiness — if you are starting a business and expect to incur meaningful costs before revenue arrives, registering voluntarily lets you reclaim the input VAT on those startup purchases rather than swallowing it. Registration itself is handled online through SKAT’s website and the Virksomhedsguiden portal, and you will be issued a CVR number, which doubles as your business registration number for most tax and regulatory purposes.

One practical caution: if you expect to pass the threshold during your first year, register from the start. Failing to register when required can result in penalties and a back-dated tax liability, and because the threshold is based on your sales, not your collected VAT, it is easy to slip across it without noticing.

Charging VAT and issuing invoices

When you sell to Danish customers, you add the applicable rate to your sales price. A simple illustration: if your consulting fee is DKK 10,000, you charge DKK 10,000 plus 25% moms — DKK 12,500 in total — and the additional DKK 2,500 is held on SKAT’s behalf, not yours. That framing matters because even if you forget to collect the VAT, you still owe it. The tax is calculated on the sale, and SKAT is not concerned with whether you remembered to pass the charge on to the customer.

Every VAT-registered business must issue invoices containing a defined set of details: your business name and CVR number, the customer’s CVR number for business-to-business sales, a sequential and unique invoice number, the invoice date, a description of the goods or services supplied, the amount excluding VAT, the VAT rate and the VAT amount, and the total including VAT. An invoice missing these elements can be invalidated, which in turn prevents your customer from reclaiming their input VAT — a quick way to damage a commercial relationship.

Filing returns and paying

The frequency of your VAT returns is set by your annual turnover. The system is designed so that larger businesses report more often:

Returns are submitted electronically through SKAT’s TastSelv system, and the deadline is the end of the month following the end of the period — so the first quarter (January to March) is due by 30 April. Each return reports three numbers: the sales VAT you collected, the purchase VAT you paid, and the net VAT payable, which is the difference between the two. Payment is due on the same day as the return and is made by bank transfer to your SKAT tax account (your Skattekonto), quoting your CVR number as the reference.

If you overpay, SKAT refunds the difference. If you underpay, interest accrues on the outstanding amount, and late filing and payment attract penalties of their own, so it pays to set calendar reminders around the deadlines.

Deducting input VAT

One of the main advantages of being VAT-registered is that you do not bear the cost of VAT on your business expenses. Through the deduction known as momsfradrag, you can reclaim the input VAT on purchases made exclusively for business purposes. Three conditions apply: you must hold a valid invoice with all the required details, the purchase must be for business use, and you must claim within the correct time limit — the same VAT period if possible, and within 12 months at the latest. After 12 months, the deduction is lost.

Most routine business inputs qualify: office supplies and equipment, business travel such as flights, hotels and transport, professional services from accountants, lawyers and consultants, raw materials and inventory, and business-related subscriptions and software. The exclusions are where mistakes typically happen. Food and meals are not deductible, although business entertainment for clients is 25% deductible. Cars and other passenger vehicles are excluded unless they are held for resale or used in taxi services. Purely personal expenses never qualify, and entertainment and gifts above the permitted limits are also out.

Exempt activities

Some activities sit outside the normal VAT framework altogether. Healthcare and medical services, education and teaching, financial services such as banking and insurance, real estate rental (other than short-term accommodation like hotels), insurance services, and cultural and sporting events in certain cases are all commonly exempt. If your business is primarily engaged in exempt activities, the trade-off is that you cannot reclaim input VAT on related expenses either.

The distinction between exempt and zero-rated is easy to confuse and materially consequential. With zero-rated sales such as exports, you charge 0% VAT but keep your right to reclaim input VAT on related costs. With exempt sales, you charge no VAT and also surrender the deduction — which can be the difference between reclaiming thousands of kroner and writing it off.

Trading across borders

Cross-border trade is where the rules become most technical, but they follow a clear logic. When you provide services to a VAT-registered business customer in another EU country, the reverse charge mechanism applies. In simple terms, this shifts responsibility for accounting for VAT from you, the seller, to your customer. You do not charge VAT on the invoice; instead you include the customer’s VAT number and a notation such as “Reverse charge — Article 196 of the EU VAT Directive”, and report the sale in your VAT return under reverse charge. Your customer then self-accounts for VAT in their own country — and can usually reclaim it immediately, so there is no extra cost on their side either.

Sales of goods to VAT-registered businesses elsewhere in the EU are generally treated as intra-community supplies and are VAT-free (zero-rated). To claim zero-rating you need a valid VAT number for the customer in their own country, validated through the VIES system on the European Commission’s website; the goods must be physically transported from Denmark to another EU country; and the transaction must be documented correctly, with your CVR number and the customer’s foreign VAT number on the invoice and a note such as “Intra-community supply — VAT exempt”. Keep proof of transport — delivery notes, shipping documents — because without it an audit will deny the zero-rating.

Trade beyond the EU follows a similar pattern. Exports to countries outside the EU are zero-rated, provided the goods physically leave the EU and you hold proof of export such as a bill of lading or customs declaration, with the invoice annotated “Export — VAT exempt”. Services to non-EU customers are generally outside the scope of Danish VAT altogether.

A worked example: consulting business

To see how it fits together, consider a consulting business in Copenhagen with DKK 1,000,000 in annual revenue and DKK 200,000 in business expenses. On its sales it collects 25% VAT — DKK 250,000. Against that, it deducts the input VAT on its expenses: DKK 20,000 on DKK 80,000 of office rent, DKK 10,000 on DKK 40,000 of software subscriptions, DKK 12,500 on DKK 50,000 of professional services, and DKK 7,500 on DKK 30,000 of travel — DKK 50,000 in total. The net VAT payable to SKAT is therefore DKK 200,000. Without the deductions, the bill would have been the full DKK 250,000, so disciplined record-keeping saves this business DKK 50,000 a year.

Bottom line

Danish moms is a demanding system, but also a predictable one: the rates, thresholds and deadlines are fixed, and the cross-border rules are set out in law rather than left to discretion. The habits that keep businesses out of trouble are straightforward — register promptly once turnover crosses the DKK 50,000 threshold, issue complete invoices, file on time through TastSelv, hold onto export documentation, and validate every EU VAT number through VIES. Official sources such as SKAT.dk, Virksomhedsguiden and Erhvervsstyrelsen (the Danish Business Authority) are the right first port of call. The rules can change and your own situation will have angles no general guide covers, so for anything substantial it is worth a conversation with a Danish accountant or tax adviser.