Denmark CESOP Guide — Cross-Border Payment Reporting for PSPs

Who Must Report Under CESOP?

CESOP applies broadly to payment service providers operating in Denmark:

• Banks licensed in Denmark or providing services to Danish customers.
• Payment institutions (e.g., Nets, MobilePay, and other licensed payment processors).
• Electronic money institutions (e.g., PayPal, Revolut, Wise, Lunar, Pleo).
• Other PSPs including credit institutions, post office giro services, and payment initiation service providers registered in Denmark.

If your business is a payment service provider as defined by the EU Payment Services Directive (PSD2), you are likely subject to CESOP reporting. Foreign PSPs providing services to Danish merchants may also have reporting obligations if they are not already reporting similar data in their home member state.

Which Payments Must Be Reported?

Not all cross-border payments fall under CESOP. The reporting requirement is triggered when a PSP processes 25 or more cross-border payments to the same payee in a quarter.

Key criteria:

• Cross-border: Payments where the payer is in one EU member state and the payee (recipient) is in another EU member state.
• Minimum threshold: 25 or more payments to the same payee in a calendar quarter (Q1: Jan-Mar, Q2: Apr-Jun, Q3: Jul-Sep, Q4: Oct-Dec).
• Payee: The person or business receiving the payment (not the payer). The threshold is per unique payee.
• Intermediary payments: If the PSP processes payments that are passed through (e.g., settlement payments between PSPs), these may also need to be reported depending on how they are classified.

Payments NOT subject to reporting:

• Payments processed by the PSP for its own account (e.g., paying its own suppliers).
• Payments where both the payer and payee are in the same member state.
• Payments to payees receiving fewer than 25 cross-border payments per quarter.
• Card-based payments processed by the card scheme (e.g., Visa/Mastercard) — the acquiring PSP is responsible for reporting, not the issuing PSP.

What Data Must Be Reported?

For each payee that meets the 25-payment threshold, the PSP must report the following information for the quarter:

• Payee identification: Name, address, VAT number (or other tax identification number if no VAT number), and any other identifiers.
• Bank account details: IBAN, BIC, or other identifier (e.g., card PAN) of the payee's account.
• Payment data: Date, time, amount (in reporting currency), and currency of each payment.
• Payment type: Whether it is a credit transfer, direct debit, card payment, or other type.

PSPs must also report their own identification details (name, address, registration/licence number) and the reporting period.

When and How to Report

CESOP reports are filed quarterly to SKAT via a standardised XML format. The reporting calendar:

How to report:

1. Prepare your data in the EU-standard CESOP XML schema (available from SKAT's developer portal).
2. Submit the XML file via the CESOP reporting service in TastSelv Erhverv or via the SKAT web service API.
3. SKAT validates the file and forwards the data to the EU CESOP central system within 10 days.
4. Data is then shared with the tax authorities of the payee's member state.

PSPs that are new and have no reportable data for a quarter must submit a nil return (also known as a "zero report" or "null report").

Implementation Timeline and Transition

CESOP came into effect on 1 January 2024 across all EU member states. The first reporting deadline was 30 April 2024 (covering Q1 2024).

There was a transitional period for the first two reporting quarters (Q1 and Q2 2024) during which SKAT and other member states adopted a light enforcement approach, allowing PSPs to refine their reporting systems. From Q3 2024 onwards, full enforcement applies.

For PSPs that have not yet established CESOP reporting processes, it is critical to implement compliance measures immediately, even if this requires historical data reconstruction for Q1 and Q2 2024 (if still outstanding).

Penalties for Non-Compliance

Failure to comply with CESOP reporting obligations can result in significant penalties under Danish law:

• Late filing: SKAT may impose daily fines for late submission of quarterly reports. The exact amount depends on the size of the PSP and the duration of the delay.
• Incorrect or incomplete data: Fines for submitting incorrect or incomplete data can be substantial, especially if SKAT determines that the error was intentional or due to gross negligence.
• Failure to report: If a PSP completely fails to report, SKAT may initiate an audit and impose significant penalties. In severe cases, further enforcement measures may apply.

PSPs should have robust data collection and validation processes in place to ensure timely and accurate reporting.

FAQs

Does CESOP affect my business if I am not a PSP?

No — CESOP imposes obligations on payment service providers, not on merchants or businesses receiving payments. However, if you receive cross-border payments, your PSP will report the payment data to SKAT. This data may be used by SKAT to verify your VAT compliance if you are engaged in e-commerce or cross-border sales.

How does CESOP interact with VAT obligations for e-commerce?

CESOP is designed to support VAT compliance in e-commerce. Tax authorities use CESOP data to identify merchants who receive significant cross-border payments but do not register for VAT or fail to declare VAT on cross-border sales. If you sell goods or services cross-border in the EU, ensure your VAT registration and reporting are up to date. See our VAT International Trade Guide → for details.

Do I need to report payments to non-EU countries?

No — CESOP only covers intra-EU cross-border payments where the payer is in one EU member state and the payee is in another. Payments between an EU country and a non-EU country (e.g., UK, US, China) are not reported under CESOP (they may be reportable under other frameworks).

What format should I use for reporting?

Reports must be submitted in the EU-standard CESOP XML format. The XML schema is published by the European Commission and implemented by SKAT. You can find the schema and validation rules on SKAT's developer portal (skat.dk/udvikler). Many PSPs use automated reporting tools integrated with their payment systems.

Can I delegate CESOP reporting to a third party?

Yes — PSPs can authorise a third party (e.g., an accounting firm, compliance consultant, or software provider) to submit CESOP reports on their behalf. The third party must have the necessary authorisation (tilladelse) in TastSelv Erhverv. However, the PSP remains legally responsible for the accuracy and timeliness of the reports.