Tax rate by region Denmark

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Denmark’s SaaS VAT Landscape: Essential Compliance Guide for Businesses

SaaS businesses in Denmark are subject to the European Union’s Value-Added Tax (VAT) system, which has been in place since 1967. The standard VAT rate in Denmark is 25%, applicable to most goods and services, including SaaS. Certain educational materials may be exempt from VAT. Unlike other EU member states, there is no reduced VAT rate in Denmark. Businesses must file VAT returns quarterly or biannually, and the payment deadline is within 20 days after the end of the quarter. Accurate record-keeping is crucial, with businesses required to retain digital copies of invoices and receipts for 10 years from the service’s provision date. Additionally, Denmark mandates e-invoicing for VAT compliance. By understanding these regulations and adopting best practices, such as consulting tax professionals and utilizing e-invoicing solutions, SaaS businesses can navigate Denmark’s VAT landscape efficiently.

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Denmark

Denmark adopted the EU VAT system in 1967, focusing on maintaining a robust and efficient tax administration.

Official government link: https://skat.dk/en-us/businesses/vat

25.00%

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No specific digital goods or services with reduced tax

Exempted product categories

Some educational material may be exempt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Yes

Registration procedure

Taxable persons must register via the Government portal using “E-tax for businesses” (“TastSelv Erhverv”). The following information must be provided to the Tax Authority upon registration:

For taxable persons registered outside the European Union (non-Union scheme):

Full company information: company name, trading name (if applicable), full postal address, email address, website, contact person’s name and phone number.
National tax number (if applicable).
Country where the taxable person has their place of business.
International bank account number (IBAN) and BIC.
An electronic declaration that the taxable person is not registered for VAT within the Union.
Date of commencement of using the scheme.

List of digital and electronic services liable for tax

Electronic books, images, movies, and videos, whether purchased from platforms like Shopify or accessed via services like Amazon Prime, are categorized as “Audio, visual, or audiovisual products” in tax materials.
Downloadable and streaming music, whether buying an MP3 or using music services.
Cloud-based software and as-a-Service products, including Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
Websites, hosting services, and internet service providers.
Online advertisements and affiliate marketing.

Penalties

If the declaration is not submitted, the amount owed will be estimated, leading to a fine of DKK 800 and a reminder fee of DKK 65. Additionally, interest will accrue from the date of late payment until the amount is paid. This applies to fees as well.

Registration threshold

€10,000 EU-wide OSS threshold applies to EU-established providers

Filing interval

Quarterly/Semiannualy

Filing deadline

  • standard quarterly is ~60 days (1st of 3rd month);
  • OSS is ~30 days (last day of month following quarter).

E-invoicing requirements

Yes

Record keeping

You must retain records of your activities for at least 10 years from the end of the year in which the service was provided. If requested, you must supply digital copies.

How-To Guides: Denmark SaaS VAT

Step: 1 Threshold

Effective July 1, 2003, Denmark requires non-EU vendors (including online platforms) of digital services to consumers (B2C) in Denmark to register for and collect VAT, regardless of the sales amount. The obligation was expanded to EU-established digital services providers effective January 1, 2015.

Effective January 1, 2019, Denmark applies a VAT registration threshold of EUR 10,000 for EUestablished digital services providers. The threshold does not apply to non-EU businesses.

Step: 2 Business Registration

Non-resident businesses register via the Danish Tax Agency (Skattestyrelsen). Foreign SaaS providers often use the VAT One-Stop Shop (OSS) to avoid multiple registrations.

Step: 3 TIN/VAT Number

CVR Number (8-digit Central Business Register number) or SE Number (VAT-specific ID), issued by the Danish Tax Agency (Skattestyrelsen).

Step: 1 Standard VAT Rate

The VAT rate in Denmark is 25%.

Step: 2 VAT Formula

To calculate your tax amount, use the following formula: 

 

Tax Amount = Net Price x 25%

Step: 3 Reverse Charge (B2B)

Applies to cross-border SaaS/Digital services. The Danish business customer is responsible for reporting and paying the VAT. The foreign supplier does not charge Danish VAT.

Step: 1 Selling B2C

You must charge 25% Danish VAT. Use the One-Stop Shop (OSS) “Non-Union” or “Union” scheme to collect and remit tax.

Step: 2 Selling B2B

Verify the customer’s VAT/CVR number via VIES. Note on the invoice that “Reverse Charge” applies.

Step: 3 Invoice Requirements

Invoices must contain:

  • Supplier & Buyer name/address.
  • Supplier’s VAT ID.
  • Buyer’s VAT ID (for B2B).
  • Unique sequential number.
  • Date of issue/supply.
  • Service description (e.g., “SaaS Subscription”).
  • Net price, VAT rate (25%), and total amount in DKK or other currency (VAT amount must be in DKK).
  • “Reverse Charge” mention (if B2B).

Step: 1 Filing Interval

• OSS: Quarterly.
• Standard Registration: Monthly, Quarterly, or Half-yearly (depending on turnover). New businesses usually file quarterly.

Step: 2 Filing Deadline

• OSS: Last day of the month following the quarter (e.g., April 30 for Q1).
• Standard: Varies (e.g., March 2 for Q4).

Step: 3 Submission

E-tax for businesses (TastSelv Erhverv) portal. Payments made via bank transfer or the Skattekontoen (Tax Account).

Step: 4 Record Keeping

5 years (Danish Bookkeeping Act) or 10 years if using the OSS scheme.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Denmark’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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