Denmark VAT Registration Guide (Momsregistrering, VAT Returns)

VAT Registration Threshold

Denmark applies a mandatory VAT registration threshold based on turnover. Understanding this threshold is essential for compliance:

• 50,000 DKK turnover in 12 consecutive months — You must register for VAT as soon as your taxable turnover exceeds 50,000 DKK within any rolling 12-month period. This is not limited to calendar years; it is a continuous test. Monitor your turnover monthly to avoid missing the threshold.
• Momsfri omsætning (VAT-free turnover) below threshold — If your turnover is below 50,000 DKK, you are not required to register for VAT. You do not charge VAT to customers and cannot deduct input VAT on purchases. This is referred to as momsfri omsætning.
• Voluntary registration possible — Even if your turnover is below 50,000 DKK, you can choose to register voluntarily (frivillig momsregistrering). This can be beneficial if you have significant input VAT on expenses (e.g., startup costs) that you want to recover. Once voluntarily registered, you must follow all VAT rules for at least 2 years.
• Registration date — VAT registration is effective from the date you apply, subject to SKAT approval. If you exceed the threshold, you must register within 8 days of the date the threshold was exceeded. Failure to register promptly can result in penalties.
• CVR linked automatically — VAT registration is linked to your CVR number. When you register your business via virk.dk, you can select VAT registration as part of the process. The CVR number serves as your VAT identification number for all purposes, including cross-border transactions.

Note: The 50,000 DKK threshold applies to taxable turnover. Certain types of income (e.g., exempt supplies like financial services, health, education) are not counted toward the threshold. For more on registering your business, see our starting a business guide →.

Danish VAT Rates

Denmark applies a relatively simple VAT rate structure with a standard rate and a few exemptions. There is no reduced rate (unlike many other EU countries):

• Standard rate: 25% — The standard VAT rate applies to most goods and services, including retail sales, restaurant meals, consulting services, digital products, electronics, furniture, clothing, and professional services. Denmark has one of the highest standard VAT rates in the European Union, at 25%.
• 0% (VAT-exempt) supplies — Certain supplies are exempt from VAT (0% rate). These include: newspapers and periodicals (printed, not digital), passenger transport services (buses, trains, taxis, flights), financial services (banking, lending, insurance transactions), health services (medical care, dental, hospital services), education services (teaching, training provided by recognized institutions), and most rental of residential property.
• Exempt vs. zero-rated confusion — The 0% rate in Denmark is more accurately described as VAT-exempt rather than zero-rated. This distinction matters: with a true zero rate, you can still deduct input VAT on related purchases. With VAT-exempt supplies (momsfritagelse), you generally cannot deduct input VAT. This is called manglende fradragsret (no deduction right). For example, a bank providing exempt financial services cannot deduct VAT on its IT costs.
• No reduced rate — Unlike many EU countries that apply reduced rates (5-10%) to specific goods like food, children's clothing, or books, Denmark applies 25% standard rate to almost all goods and services. Food, children's clothing, and books are all subject to 25% VAT.

Understanding whether your supplies are taxable or exempt is essential for determining your VAT obligations and deduction rights. For the tax implications of VAT-exempt activities, see our business tax return guide →.

Filing VAT Returns (Momsangivelse)

VAT returns must be filed electronically through TastSelv Erhverv using MitID Erhverv. The frequency and deadlines depend on your turnover:

• Quarterly filing (most common) — Most businesses file VAT returns quarterly. The VAT periods are: Q1 (January-March), Q2 (April-June), Q3 (July-September), Q4 (October-December). The filing deadline is 1 month after the quarter end: Q1 due May 1, Q2 due August 1, Q3 due November 1, Q4 due February 1. Payment is due simultaneously with the return.
• Yearly filing for small businesses — Businesses with turnover up to 5 million DKK may apply for yearly VAT filing (helårsmoms). The return covers the full calendar year and is due February 1 of the following year. Yearly filing reduces administrative burden but requires careful cash flow planning since VAT is paid only once a year.
• Monthly filing (for large businesses) — Businesses with annual turnover exceeding 100 million DKK must file monthly VAT returns. Monthly returns are due 1 month after the end of each month.
• Digital filing in TastSelv Erhverv — VAT returns are filed online through SKAT's TastSelv Erhverv portal. The system pre-populates certain data and allows manual entry of output VAT, input VAT, and adjustments. Most accounting software can export VAT return data directly to TastSelv Erhverv format.
• Late filing consequences — Late filing triggers a daily penalty of approximately 0.7% of the unpaid VAT amount. After three late filings within 12 months, SKAT may require a deposit or demand more frequent filing (monthly instead of quarterly).

For more on VAT return filing in conjunction with other tax obligations, see our international trade guide → and starting a business guide →.

VAT Deductions (Købsmoms)

Businesses can deduct the VAT they pay on purchases related to their taxable business activities. This is called købsmoms (input VAT deduction). Getting deductions right is critical — SKAT frequently audits input VAT on specific cost categories. Key rules:

• Input VAT on business purchases deductible — VAT paid on goods and services used for taxable business activities is generally fully deductible. This includes VAT on raw materials, inventory, rent, utilities, IT equipment, professional fees (legal, accounting, consulting), marketing and advertising, and necessary business travel (hotels, flights, meals for business trips). The purchase must be directly related to your taxable business activity — personal or mixed-use purchases are not fully deductible.
• Entertainment and representation (repræsentation) — VAT on entertainment and customer representation is only 25% deductible. This includes meals with clients, event tickets, gifts to business partners, and other representation costs. The remaining 75% of the VAT is a non-deductible cost. This 25% rule applies regardless of the business purpose. Employee-only meals (e.g., staff canteen or team events) may have different treatment — VAT on staff canteen costs is generally not deductible, while VAT on occasional employee events (Christmas party, summer party) may be deductible within reason.
• Company cars and mixed-use assets — If an asset is used for both business and private purposes (e.g., a car used for both work and personal travel), you must correct the input VAT deduction to reflect only the business-use portion. You have two methods: (a) deduct only the business proportion (based on documented business km / total km) at the time of purchase, or (b) deduct full VAT and report private use as output VAT in subsequent returns. A mileage log (kørebog) is essential for method (a). Without a mileage log, SKAT may deny the full deduction and impose penalties. For cars with mixed use, the deduction typically ranges from 50–80% depending on actual business usage. Cars used exclusively for business (rare in practice) qualify for full deduction.
• Buildings, construction, and capital goods — VAT on new construction, renovation, and major repairs to business premises is generally deductible (if the property is used for taxable activities). There is a 10-year adjustment period for capital goods (buildings, major renovations) — if the business use changes within 10 years, you must adjust the original deduction. For example, if you deduct full VAT on a building renovation and later sell the building VAT-free, you must repay a portion of the deduction. Keep records of all capital goods purchases and their VAT treatment for the full 10-year period.
• Time limits for claiming input VAT — You must claim input VAT deduction in the VAT return for the period when you received the invoice (or paid it, depending on your accounting method). Missed deductions can be corrected within a 6-month window after the original filing deadline. After this window, corrections require a special adjustment and SKAT approval. In practice, review each VAT return before filing to ensure all input VAT is captured — especially in the first return after a large purchase period.
• Partial exemption for partly exempt businesses — If your business makes both taxable and exempt supplies (e.g., a company providing both consulting services (taxable) and financial services (exempt)), you are a partially exempt (delvis momsfritaget) business. You can only deduct input VAT related to your taxable supplies. Input VAT on general overhead must be apportioned using a pro-rata calculation based on the ratio of taxable turnover to total turnover.
• Pro-rata calculation — The standard pro-rata percentage is calculated as: (taxable turnover / total turnover) × 100. The resulting percentage is applied to input VAT on mixed-use costs. SKAT provides a simplified method for small businesses. The pro-rata should be reviewed annually and adjusted if it changes by more than 10 percentage points. If the adjustment is less than 1% of total input VAT in absolute terms, SKAT generally accepts no adjustment — this is the de minimis rule. You must document your pro-rata calculation methodology in your accounting notes to survive a SKAT audit.

Proper tracking of input VAT by cost category is essential for accurate VAT returns. Most accounting software tracks input VAT automatically if configured correctly, but you should manually review high-risk categories (entertainment, cars, buildings) each period. For the relationship between VAT and income tax, see our business tax return guide →.

International VAT

Cross-border transactions have special VAT rules that differ from domestic transactions. Understanding these is critical for businesses trading internationally:

• EU sales: VAT-free if buyer has VAT number — Sales of goods to VAT-registered businesses in other EU countries are VAT-free (0% with deduction right) provided the buyer's valid VAT number is obtained and recorded. The sale must be reported on the EU sales list (EU-salgsliste). If the buyer is a non-VAT-registered private individual, Danish VAT (25%) applies for distance selling above certain thresholds.
• EU purchases: reverse charge — When purchasing goods from another EU country, you must account for Danish VAT under the reverse charge mechanism. You report both output VAT and input VAT on the same transaction in your VAT return, resulting in a net-zero effect (if fully deductible). The purchase also goes on the EU purchase list (EU-købsliste).
• Export outside EU: VAT-free with proof — Exports to countries outside the EU are VAT-free (0%) provided you can document that the goods have physically left the EU. Acceptable proof includes: customs export declaration, transport documents (bill of lading, airway bill), and proof of payment. Keep this documentation for 5 years.
• Import: customs clearance and import VAT — When importing goods into Denmark from outside the EU, you must clear customs and pay import VAT (25% of the customs value plus duty). Import VAT is generally immediately recoverable as input VAT in your VAT return (if the goods are used for taxable supplies). Customs duties are not recoverable.
• One Stop Shop (OSS) for EU distance selling — The EU's One Stop Shop (OSS) scheme simplifies VAT compliance for distance selling of goods and cross-border B2C services. Instead of registering for VAT in each EU country where you sell, you can report all EU distance sales through a single OSS return in Denmark. Danish VAT rates apply to Danish sales; the VAT rate of the destination country applies to other EU sales.

For a deep dive into cross-border VAT compliance, see our dedicated international trade guide →. For overall business compliance, see our starting a business guide →. Construction businesses should note the special reverse charge VAT rules for B2B construction services — see our construction industry tax guide →.

Special Schemes

Denmark offers several special VAT schemes that simplify compliance for specific types of businesses:

• Rental properties: property rental 0% VAT with exemption — Rental of commercial property is generally VAT-exempt. However, landlords can opt for VAT registration (frivillig momsregistrering) on commercial property rental, which allows them to charge 25% VAT to tenants and deduct input VAT on construction and maintenance costs. This is common for new buildings where significant VAT is incurred. Tenants who are VAT-registered can deduct the VAT on rent.
• Used goods margin scheme (brugtmargenordningen) — Dealers in second-hand goods (e.g., vintage shops, car dealers) can use the margin scheme. Under this scheme, VAT is only due on the dealer's margin (selling price minus purchase price), not on the full selling price. This avoids double taxation on goods that already bore VAT when first sold. The scheme applies to used goods, antiques, and collectibles. Sellers cannot show VAT separately on invoices to customers.
• Travel agents margin scheme (rejsebureauordningen) — Travel agents and tour operators can use a special margin scheme where VAT is charged only on the margin (the difference between the total price paid by the traveler and the cost of underlying travel services purchased from third parties). This simplifies VAT accounting for package tours that include services in multiple countries.
• Flat-rate scheme for farmers (landbrugsordningen) — Farmers and certain agricultural businesses can use a flat-rate scheme where output VAT is calculated at a reduced flat rate (approximately 12% for most agricultural products) on sales, with a correspondingly limited deduction for input VAT. This simplifies VAT accounting for small agricultural operations. For comprehensive guidance on agricultural taxation, including income tax rules and subsidies, see our Agriculture and Farming Tax Guide →.
• VAT groups (momsgrupper) — Closely related companies (e.g., parent-subsidiary) can form a VAT group and be treated as a single VAT person. Transactions within the group are disregarded for VAT purposes. VAT grouping can simplify compliance and prevent VAT costs on intra-group transactions. The group must apply to SKAT for approval and meet strict criteria regarding financial, economic, and organizational integration. For detailed guidance on forming, managing, and deregistering VAT groups, see our VAT Groups Guide →.

Choosing the right VAT scheme for your business type can reduce compliance costs and improve cash flow. Consult with a revisor before opting for a special scheme, as some have irrevocable consequences. For more on VAT compliance alongside corporate tax, see our business tax return guide →. If your business sells VAT-exempt services (healthcare, education, financial services, insurance), you may be liable for payroll tax (lønsumsafgift) instead — see our payroll tax guide →. For VAT treatment of cryptocurrency transactions and digital asset businesses, see our Business Crypto Guide →. For VAT rules on digital platform operators and gig economy businesses, see our Digital Platform Business Tax Guide →.

FAQs

What is the VAT threshold in Denmark?

The VAT registration threshold is 50,000 DKK in taxable turnover within any 12 consecutive months. Once this threshold is exceeded, you must register for VAT within 8 days. Turnover below this threshold is VAT-free (momsfri omsætning).

Can I deduct VAT on a company car?

Yes, but only partially. If the car is used for both business and private purposes, you can deduct input VAT proportional to the business-use percentage. This must be documented with a kørebog (mileage log). If the car is used exclusively for business (which is rare in practice), full VAT deduction is available. VAT on cars used exclusively for private purposes is not deductible.

How do I handle VAT on exports to non-EU countries?

Exports to non-EU countries are VAT-free (0%) provided you have proof of export (customs declaration, transport documents). No Danish VAT is charged. You can still deduct input VAT on related costs. Exports must be reported separately in your VAT return.

What is the penalty for late VAT filing?

Late filing triggers a daily penalty of approximately 0.7% of the unpaid VAT amount. After three late filings within 12 months, SKAT may demand a security deposit or require monthly filing. Repeated non-compliance can result in forced collection and potential criminal charges.

Can I get a VAT refund if my input VAT exceeds output VAT?

Yes. If your input VAT (købsmoms) exceeds output VAT (salgsmoms) in a period, you have a VAT refund from SKAT. This commonly occurs in startup phases with significant investment costs. SKAT processes refunds automatically when you file your VAT return. Refunds are typically paid within 30 days of filing.