Denmark VAT (MOMS) System – Complete Guide
Denmark VAT (MOMS) System
Denmark, a highly developed Nordic country, operates a well-structured and transparent VAT (Value Added Tax) system. Locally known as MOMS (short for "Meromsætningsafgift"), VAT is applied to most goods and services consumed within the country. Whether you're a business owner, freelancer, or international seller, understanding Denmark's VAT rules is essential for compliance and smooth operations.
This guide provides a detailed overview of how VAT works in Denmark, including current rates, registration requirements, invoicing rules, filing deadlines, and special scenarios.
🔹 VAT Rates in Denmark
Denmark uses a single standard VAT rate:
- Standard VAT Rate: 25%
There are no reduced or zero VAT rates for most goods and services, unlike many other EU countries. All standard goods and services - from groceries to digital products - are taxed at 25%.
Exemptions apply in limited cases such as:
- Medical services
- Education
- Financial and insurance services
- Charitable fundraising
🧾 VAT Registration in Denmark
Any business - local or foreign - must register for VAT in Denmark if:
- Its taxable turnover exceeds DKK 50,000 (approx. €6,700) in a 12-month period.
- It supplies digital services to Danish consumers (non-EU businesses must register regardless of threshold).
- It is involved in distance selling to Danish customers (threshold rules apply under EU OSS schemes).
Registration is done via the Danish Business Authority (Erhvervsstyrelsen), and a CVR number is issued (business ID with VAT component).
🧮 VAT Number Format
The Danish VAT number is called a CVR number and follows this format:
- DK12345678
It consists of the country code “DK” followed by an 8-digit number.
📋 VAT Invoices in Denmark
To comply with Danish VAT law, businesses must issue proper invoices containing:
- Seller’s and buyer’s name, address, and VAT number
- Unique invoice number
- Invoice date and supply date
- Description of goods/services
- VAT rate applied and total VAT amount
- Total invoice amount (with and without VAT)
Electronic invoicing (e-invoicing) is required for B2G transactions (business to government).
📅 VAT Filing & Payment Deadlines
VAT filing frequency depends on turnover:
- Monthly: For businesses with turnover over DKK 50 million
- Quarterly: For businesses with turnover between DKK 5-50 million
- Bi-annually: For businesses below DKK 5 million
Returns are filed online via TastSelv Erhverv, the Danish tax portal.
🌍 Cross-Border VAT and EU Rules
As an EU member, Denmark follows EU VAT directives. Key rules include:
- Reverse charge mechanism applies to B2B intra-EU supplies.
- Non-EU digital service providers must register under the One-Stop Shop (OSS) scheme or through VOES (VAT on e-services).
- Import VAT is payable at customs but can be reclaimed by VAT-registered businesses.
🧾 VAT Refunds
Foreign businesses not established in Denmark but paying VAT on Danish expenses (e.g., hotels, trade shows) may claim a refund via the EU VAT Refund Scheme (for EU businesses) or the 13th Directive (for non-EU businesses).
✅ Compliance Tips for Businesses
- Ensure accurate and timely VAT invoicing.
- Track turnover to avoid late registration penalties.
- Use accounting software to automate VAT calculations and returns.
- Retain VAT records for at least 5 years.
- Stay updated with rules via SKAT (Danish Tax Agency) and EU VAT updates.
📌 Example: VAT Calculation in Denmark
Example: A web design company sells services worth DKK 10,000 to a Danish customer.
- VAT (25%) = DKK 2,500
- Total Invoice = DKK 12,500
Denmark’s VAT (MOMS) system is straightforward but requires careful attention to registration thresholds, invoicing rules, and filing deadlines. Whether you're selling digital products, importing goods, or operating within the EU, understanding how VAT works in Denmark is essential for staying compliant and avoiding penalties.
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