Denmark Hospitality and Tourism Tax Guide

Restaurant and Catering VAT

The VAT treatment of food and beverage sales in Denmark depends on where and how the food is consumed:

Dine-In — 25% VAT

• On-premises consumption: Food and beverages served for consumption on the restaurant's premises (or at a designated seating area) are subject to the standard 25% VAT rate. This applies regardless of the type of establishment — restaurants, cafés, canteens, food courts, and pop-up dining events.
• Service and cover charges: Any service charge (dækketøj, service) or minimum spend requirement (minimumsforbrug) included in the bill is part of the single supply of restaurant services and taxed at 25%.
• Catering with service: Catering that includes additional services (waitstaff, delivery, setup, serving equipment) is typically treated as restaurant services at 25% VAT. The key test is whether the supply includes a significant service element beyond the food itself — the Danish Tax Council (Skatterådet) has issued several binding rulings (SKM2024.xxx series) on catering classification.

Takeaway — 0% VAT (ML §5, stk. 1, nr. 1)

• Food for off-premises consumption: Food and beverages sold for consumption off the premises are subject to 0% VAT. This zero-rate applies to the standard food items listed in ML §5, stk. 1, nr. 1 — bread, dairy, meat, fish, vegetables, prepared meals, and non-alcoholic beverages. The food must be sold in a condition suitable for takeaway (packaged, boxed, wrapped) and the customer must not consume it on the premises.
• The decisive criterion — where is consumption intended? The VAT rate depends on the intended place of consumption at the time of sale. If the restaurant provides seating, tables, cutlery, and the customer chooses to eat there, it is 25%. If the restaurant has no seating or the customer explicitly orders for takeaway, it is 0%. Mixed operations (restaurants with both dine-in and takeaway) must account for sales separately and maintain records supporting the VAT split.
• Delivery (udbringning): Home delivery of restaurant food is treated as takeaway — 0% VAT, provided the food is sold for consumption off-premises. The delivery fee itself is part of the single supply of food and follows the VAT rate of the food (0%). If the delivery fee is charged separately by a third-party platform, the platform's fee is taxable at 25% as a standalone service.
• Alcoholic beverages: Alcoholic beverages (beer, wine, spirits) sold for takeaway are subject to 25% VAT even when sold for off-premises consumption — alcohol is excluded from the zero-rate food list in ML §5. Non-alcoholic beer and wine (under 0.5% ABV) qualifies for 0% VAT as a food item.
• Soft drinks and bottled water: Non-alcoholic beverages (sodas, juices, bottled water) are 0% VAT when sold for takeaway, as they fall within the food definition in ML §5.

VAT Compliance for Mixed Operations

• Separate accounting required: Restaurants with both dine-in (25%) and takeaway (0%) sales must maintain separate till systems or clearly distinguishable product codes. SKAT expects daily reconciliation of sales by VAT rate. Audits frequently sample a week of operations and extrapolate errors to the full period.
• Convenience goods: Restaurants that also sell convenience goods (crisps, chocolate bars, ice cream for off-premises consumption) at 0% must ensure these are genuinely takeaway items and not consumed on the premises. Pre-packed ice cream sold from a freezer for takeaway is 0%; ice cream served in a cup or cone for immediate consumption on the premises is 25%.
• Buffet and all-you-can-eat: Buffet sales are 25% VAT regardless of whether some food is theoretically consumed off the premises — the nature of the supply is restaurant services. Sunday brunch, smørrebrødsborde, and similar offerings are fully taxable at 25%.

Hotel Accommodation VAT

• Standard rate of 25%: Hotel accommodation in Denmark is subject to the standard 25% VAT rate. Unlike most EU countries (which apply a reduced rate of 5–13% to hotel stays), Denmark has no reduced rate for accommodation. This makes Danish hotels relatively expensive from a VAT perspective compared to neighbouring Germany (7%) or Sweden (12%).
• What is included: The 25% rate applies to room charges, breakfast (when included in the room price), minibar sales, pay-per-view TV, and other incidental hotel services provided as part of the accommodation supply.
• Conference and meeting facilities: Rental of conference rooms with catering is generally a single supply of hotel services at 25% VAT. If the conference room is rented without any catering or hospitality services, it may be a separate supply of real estate — exempt from VAT unless the hotel opts for VAT on commercial property (ML §13, stk. 1, nr. 9 — the VAT option for commercial property). See our VAT Registration Guide → for the property VAT option rules.
• Long-term stays (over 30 days): Accommodation exceeding 30 consecutive days is treated as tax-exempt rental of immovable property (ML §13, stk. 1, nr. 9) — no VAT is charged on stays beyond 30 days. Hotels must apportion the VAT between the first 30 days (25% VAT) and the remainder (exempt). The hotel may opt for VAT on the long-term portion if the property is used for taxable economic activity.

Short-Term Rentals (Airbnb, Booking.com)

• Næring trigger — 30-day rule: Renting out a property (or room) for short periods triggers næring (trade) status — making the rental income taxable as business income — if the total rental period exceeds 30 days per calendar year. Below 30 days, the income is treated as capital gains (not subject to AM-bidrag or B-tax). Above 30 days, full business taxation applies with B-tax and AM-bidrag obligations. This rule applies to both owners and tenants subletting.
• Furnished room exemption: Renting out a furnished room in your own home (the owner-occupied dwelling) is exempt from næring taxation if the rental income does not exceed 45,000 DKK per year (2026 rate, indexed annually under LL §15 O). The exemption covers both short-term and long-term room rentals. Above the threshold, the excess is taxable as capital income (not B-income).
• VAT on short-term rentals: Short-term holiday rentals (sommerhus, lejlighed) are generally exempt from VAT as rental of immovable property (ML §13, stk. 1, nr. 9). However, if the rental includes significant additional services (daily cleaning, breakfast, concierge), the service may be reclassified as hotel accommodation at 25% VAT. The distinction between holiday rental (exempt) and hotel services (25% VAT) depends on the level and nature of ancillary services provided.
• Platform reporting (DAC7): Since 2024, digital platforms (Airbnb, Booking.com, Vrbo) must report rental host income to SKAT under the DAC7 directive. SKAT cross-references platform-reported income with hosts' tax returns. Non-compliance triggers automatic assessments and penalties. Hosts must ensure their reported income matches platform data.
• Property tax (ejendomsværdiskat): Short-term rental hosts remain liable for ejendomsværdiskat (property value tax) on the full property value. The rental income does not affect the property tax calculation. See our Property Tax Guide →.

Tips and Service Charges

• Voluntary tips (drikkepenge): Tips given voluntarily by customers (cash or card) are taxable income for the employee receiving them. The employee must report tips as A-income. Employers must include tips paid via card in the employee's A-income and withhold A-tax and AM-bidrag. Cash tips are legally the employee's responsibility to report — in practice, many go unreported, but SKAT has intensified enforcement through card transaction analysis.
• Service charges (servicegebyr): Automatic service charges (e.g., 5% added to the bill) are part of the restaurant's taxable turnover — they are VAT-inclusive and subject to the same VAT rate as the underlying food/beverage sale (25% or 0%). The service charge is income for the restaurant, not the employee. If the restaurant distributes service charges to staff, the distribution is treated as A-income (salary) for the employees, with full A-tax and AM-bidrag withholding.
• Pooled tip systems: Tips collected centrally and distributed among staff are A-income for each employee at the time of distribution. The employer must operate a payroll run for the tip distribution with standard tax withholding.
• Cover charge (dækketøj / bordpenge): Fixed cover charges per person are part of the restaurant's turnover, taxed at 25% VAT. If distributed to waitstaff, it becomes A-income.

Food Delivery Platforms (Wolt, Just Eat, Uber Eats)

• Platform commission fees: Commission fees charged by delivery platforms to restaurants are taxable at 25% VAT as a digital service. These are separate from the food transaction itself and do not benefit from the payment services exemption (the platform provides marketing, ordering, and logistics, not payment processing — though see the fintech guide for mixed service platforms).
• Delivery fees: Delivery fees charged to consumers by the platform (not by the restaurant) are part of the platform's separate supply and are taxable at 25% VAT. If the platform acts as agent and the delivery fee is passed through to the restaurant, the VAT treatment follows the food (0% for takeaway food, 25% for alcohol). Most platforms act as principals in the delivery chain, making their fees a separate taxable supply.
• Restaurant sales via platform: When a restaurant sells through a platform, the restaurant's supply to the consumer is takeaway food at 0% VAT (assuming the food is for off-premises consumption). The restaurant issues an invoice to the consumer for 0% VAT. The platform's commission to the restaurant is a separate B2B supply — the platform charges 25% VAT on its commission to the restaurant (which the restaurant can deduct if VAT-registered).
• Deemed supplier rules: As of 2025, digital platforms facilitating restaurant delivery may be treated as the deemed supplier for VAT purposes if the underlying restaurant is not VAT-registered or if the platform sets the prices and terms. This means the platform must account for VAT on the full consumer price (0% for food, 25% for alcohol) and issue VAT invoices. Platforms should assess whether they are a deemed supplier under the new EU e-commerce VAT rules — see our E-Commerce VAT Guide →.

Hospitality Business Tax Deductions

• Entertainment and representation: Business entertainment costs (kundebespisning, repræsentation) are 25% deductible (LL §8, stk. 4). This means only 25% of the cost (excluding VAT) reduces taxable income. The VAT on entertainment costs is not recoverable. For restaurant owners themselves, costs of entertaining business contacts follow the same rule.
• Staff meals (personalemad): Free or subsidised meals provided to hospitality staff are tax-free for the employee when provided on the employer's premises as a natural part of the employment. The employer can deduct the cost of ingredients (at 0% VAT on food) but not the potential restaurant margin. If the employee pays a reduced price (personalemadsordning), the difference between the price paid and the market value is a taxable fringe benefit.
• Wastage and spoilage: Food and beverage wastage (svind, kassation) is a deductible operating expense when properly documented. Routine wastage of up to 3–5% of purchases is accepted without detailed documentation. Higher wastage rates require explanation (menu change, event cancellation, spoilage records).
• Kitchen equipment and fit-out: Kitchen equipment, furniture, and restaurant fit-out costs are capitalised and depreciated. Fixtures and fittings (inventar, installationer) are depreciated at a maximum rate of 25% declining balance (afskrivningsloven §18). Building improvements (ombygning) are depreciated at 4% or 6% depending on the construction date. Leasehold improvements are amortised over the lease term (minimum 5 years).
• Tip payout as salary expense: Tips and service charges paid out to employees are deductible salary expenses for the employer, subject to A-tax and AM-bidrag. The employer deduction is for the gross amount paid (including the employer's AM-bidrag of 12.5% on top of the salary cost for non-covered employees or 0% for covered — see our Labour Market Contribution Guide →).

Tourism-Specific Schemes

• VAT refund for foreign tourists (Toldfritagelse/Tax Free): Non-EU residents are entitled to a refund of Danish VAT on goods purchased for export from Denmark (ML §47). The minimum purchase amount is 300 DKK per store per day. The refund covers the full 25% VAT minus an administrative fee charged by the refund provider (typically 10–15% of the VAT amount). Accommodation and restaurant services are not eligible for tourist VAT refund — it applies only to goods taken out of the EU in personal baggage.
• MICE and business events: Denmark promotes the meetings, incentives, conferences, and exhibitions (MICE) sector through Wonderful Copenhagen and local DMOs. VAT on conference services (venue, catering, AV equipment) is 25% — there is no reduced rate for business events. However, conference organisers can recover input VAT on event costs if the conference is a taxable supply (i.e., the organiser charges VAT on delegate fees).
• Tour operators and margin scheme: Danish tour operators (rejsearrangører) may use the tour operators' margin scheme (TOMS) under ML §51–53 for package tours. Under TOMS, VAT is calculated on the margin (package price minus direct costs) rather than the full package price. This avoids double taxation on cross-border packages (transport, accommodation, and services sourced in different EU countries). The margin is taxed at the Danish 25% rate on the tour operator's margin, even if the underlying services are subject to different VAT rates in other countries. See our VAT International Trade Guide → for TOMS details.
• Culture and entertainment VAT: Ticket sales for cultural events (concerts, theatre, museums) are subject to reduced VAT rates or exemptions in many EU countries. In Denmark, most cultural event tickets are subject to the standard 25% VAT rate, though certain performing arts events are 0% VAT under the cultural exemption rules. Hospitality venues hosting cultural events (restaurant with live music, hotel hosting an exhibition) must assess whether the cultural element is a separate supply or ancillary to the hospitality service.

For general hospitality business formation in Denmark, see our Starting a Business Guide →. For employee hiring and payroll, see our Hiring Employees Guide →.