Danish VAT (Moms): Complete Guide for Businesses

VAT (Value Added Tax), known as moms in Danish, is a consumption tax charged on most goods and services sold in Denmark. If you run a business in Denmark — whether you’re a freelancer, a startup, or an established company — understanding moms is essential. This guide covers everything from registration to filing to cross-border trade.

What Is Danish VAT (Moms)?

VAT is a tax added to the price of goods and services at each stage of production and distribution. As a business, you collect VAT from your customers and pay it to SKAT (the Danish Tax Agency). You can also reclaim VAT you pay on business purchases.

Danish VAT rates:

The standard rate of 25% is one of the highest in Europe, but the system is straightforward once you understand the rules.

When to Register for VAT

You must register for VAT if your annual turnover exceeds DKK 50,000. Turnover is the total value of your sales (excluding VAT).

Key points:

• Mandatory registration: turnover > DKK 50,000 in a 12-month period
• Voluntary registration: allowed below DKK 50,000 (useful if you want to deduct input VAT on startup costs)
• Registration is done via SKAT’s website (Virksomhedsguiden)
• You receive a CVR number (business registration number) upon registration

Tip: If you’re starting a business and expect to exceed the threshold within your first year, register immediately. Failing to register when required can result in penalties and back-dated tax liability.

How to Charge VAT

When you sell goods or services to Danish customers, you add 25% (or the applicable rate) to your sales price.

Example: Your consulting fee is DKK 10,000. You charge DKK 10,000 + 25% moms = DKK 12,500. The DKK 2,500 is collected on behalf of SKAT.

Invoice Requirements

Every VAT-registered business must issue invoices that include:

• Your business name and CVR number
• Customer’s CVR number (for B2B sales)
• Invoice number (sequential, unique)
• Invoice date
• Description of goods or services
• Amount excluding VAT
• VAT rate and VAT amount
• Total amount including VAT

Failure to include these details can invalidate your invoice and prevent VAT deductions for your customer.

Filing VAT Returns

The frequency of your VAT returns depends on your annual turnover:

Filing deadline: The end of the month following the end of the period. For example, Q1 (January–March) is due by 30 April.

Filing is done electronically via SKAT’s TastSelv system. You report:

• Sales VAT (moms you collected)
• Purchase VAT (moms you paid on business expenses)
• Net VAT payable (sales VAT minus purchase VAT)

Payment Deadlines

Payment is due on the same date as your VAT return filing. You pay via bank transfer to SKAT’s tax account (Skattekontoen). Your payment reference is your CVR number.

If you overpay, SKAT will refund the difference. If you underpay, interest accrues on the outstanding amount.

VAT Deductions (Momsfradrag)

You can deduct input VAT (momsfradrag) on purchases made exclusively for business purposes. This is one of the main advantages of being VAT-registered — you don’t bear the cost of VAT on your business expenses.

To claim a deduction, you must:

• Hold a valid invoice with all required details
• Use the purchase for business purposes
• Claim within the correct time limit

What you CAN deduct:

• Office supplies and equipment
• Business travel (flights, hotels, transport)
• Professional services (accounting, legal, consulting)
• Raw materials and inventory
• Business-related subscriptions and software

What you CANNOT deduct:

• Food and meals (except entertainment for business clients — 25% deductible)
• Cars and passenger vehicles (except vehicles for resale or taxi services)
• Personal expenses
• Entertainment and gifts above permitted limits

Time limits for claiming deductions:

• Current period: deduct in the same VAT return
• Up to 12 months after: still possible
• After 12 months: deduction is lost

Exempt Activities

Some activities are exempt from VAT. If your business primarily performs exempt activities, you cannot deduct input VAT on related expenses.

Commonly exempt activities:

• Healthcare and medical services
• Education and teaching
• Financial services (banking, insurance)
• Real estate rental (except short-term accommodation like hotels)
• Insurance services
• Cultural and sporting events (in certain cases)

Important: Exempt is not the same as zero-rated. With exempt sales, you don’t charge VAT but also can’t reclaim VAT on related costs. With zero-rated sales (like exports), you charge 0% VAT but can still reclaim input VAT.

Reverse Charge Mechanism

The reverse charge mechanism shifts the responsibility for paying VAT from the seller to the buyer. It applies to B2B services provided to EU businesses.

When it applies:

• You provide services to a business customer in another EU country
• The customer is VAT-registered in their own country

What you do:

• Don’t charge VAT on your invoice
• Include the customer’s VAT number and the notation: “Reverse charge — Article 196 of the EU VAT Directive” (or similar)
• Report the sale in your VAT return under reverse charge

What the customer does:

• Self-accounts for VAT in their own country
• Can usually reclaim the VAT immediately

EU Trade (Intra-Community Supply)

Selling goods or services to VAT-registered businesses in other EU countries is generally VAT-free (zero-rated).

Requirements for zero-rating:

• The customer has a valid VAT number in their EU country
• You validate the VAT number via the VIES (VAT Information Exchange System) on the European Commission website
• The goods are physically transported from Denmark to another EU country
• The transaction is documented correctly

On your invoice:

• Don’t charge Danish VAT
• Include both your CVR and the customer’s foreign VAT number
• Note: “Intra-community supply — VAT exempt”

Keep proof of transport (delivery notes, shipping documents) to support the zero-rating if SKAT audits you.

Non-EU Trade (Exports)

Exports to countries outside the EU are zero-rated for VAT purposes.

Requirements:

• The goods must physically leave the EU
• You must have proof of export: bill of lading, customs declaration, or equivalent document
• The invoice must state: “Export — VAT exempt”

Services to non-EU customers are generally outside the scope of Danish VAT (not subject to Danish VAT rules).

Common Mistakes to Avoid

Danish businesses frequently make these VAT errors:

1. Not registering when turnover exceeds DKK 50,000 — leads to penalties and back-dated assessments
2. Not charging VAT on taxable sales — you still owe the VAT to SKAT even if you forgot to collect it
3. Missing invoice requirements — invalid invoices mean your customer can’t deduct VAT, and you may face issues
4. Claiming input VAT on non-deductible items — food, personal expenses, and cars are commonly incorrectly claimed
5. Late filing or payment — interest and penalties apply; set calendar reminders
6. Not keeping export documentation — without proof of export, zero-rating is denied
7. Forgetting to validate EU VAT numbers — use VIES before zero-rating B2B EU sales

Worked Example: Consulting Business

Here’s a practical example to tie everything together:

Scenario: A consulting business in Copenhagen with DKK 1,000,000 in annual revenue and DKK 200,000 in business expenses.

Step 1: VAT collected on sales

Step 2: Input VAT on expenses

Step 3: Net VAT payable to SKAT

This business pays DKK 200,000 to SKAT. Without VAT deductions, the cost would be DKK 250,000 — so proper record-keeping saves DKK 50,000.

Quick Reference: Key Numbers

Further Resources

• SKAT.dk — Official VAT rules, registration, and TastSelv filing
• Virksomhedsguiden — Step-by-step business registration
• VIES — Validate EU VAT numbers
• Erhvervsstyrelsen — Danish Business Authority for regulatory guidance

This guide provides general information about Danish VAT (moms) based on current SKAT rules. Tax situations vary — consult a Danish accountant or tax adviser for advice specific to your business.