Danish tax representation

Depending on the company's geographic location, it may be necessary to appoint a tax representative. In some European countries, such as Denmark, non-EU companies that need to register for VAT must have a Danish tax representative. For companies operating outside the EU and offering services or selling goods in Denmark, the establishment of a Danish fiscal representative is mandatory.

In Denmark, the role of a tax representative includes overseeing VAT issues and sharing responsibility for Danish tax liabilities. In addition, the fiscal representative in Denmark will be responsible for filing VAT returns and representing the company in its dealings with the Danish tax authorities. This makes it easier for foreign companies to comply with local tax regulations and minimizes the risks associated with possible non-compliance.

We offer comprehensive services for managing VAT returns, complying with local regulations and dealing with Danish tax authorities. Take advantage of our experience to simplify your tax processes and avoid the risks associated with possible non-compliance.

What does tax representation consist of?

With a tax representation service, one company can act on behalf of another that wants to import its products into the European Union. Such tax representation allows companies to focus on developing their presence in the EU market. Companies gain the ability to effectively manage tax aspects, allowing them to better focus on building a strong presence in the European Union.

A fiscal representative in Denmark is responsible for various activities, including the following:

- Registering the foreign business for VAT in the host country and ensuring compliance with local tax regulations.

- Managing VAT returns, ensuring their proper preparation and submission.
- Timely submission of VAT amounts due to the relevant tax institutions.

- Maintaining accurate and detailed records of all transactions and VAT activities for compliance and audit purposes.
- Facilitating the use of the reverse-charge mechanism, shifting the responsibility for VAT payment from the seller to the buyer, where applicable.
- Acting as the primary contact with local tax authorities, managing all communications, including responding to queries and handling audits.
- Monitoring compliance with local tax laws, staying updated on regulatory changes, and advising the business accordingly.

- Complying with European reporting requirements and submitting required Intrastat declarations on a regular basis.

Limited scope tax representation focuses on servicing companies from outside the European Union that import goods and generate profits from their sale. This type of representation requires only one license, which simplifies the eventual process of adding new clients. As a result, the management of fiscal representation is more flexible and efficient.

This type of vat representation benefits a wide range of industries, including both maritime and air transport. Limited fiscal representation services are particularly popular among companies involved in importing goods into the European Union. Such a system allows goods to be imported into the EU without immediately having to pay VAT on the import, which significantly improves the liquidity of businesses.

For companies importing goods into Denmark, general fiscal representation serves as an essential solution, especially when limited fiscal representation is not an option. Such cases usually arise when transactions involve other EU Member States or when goods are imported from outside the European Union.

To facilitate this process, the Danish tax authorities issue an Article 23 permit, enabling companies to apply the reverse charge mechanism to VAT on imports. This means that VAT does not need to be paid immediately upon importation but can instead be settled in the VAT return. However, this permit is only available to non-Danish companies that have designated a general fiscal representative.

VAT registration obligations in Denmark

If a company's annual revenue does not exceed DKK 50,000, VAT registration in Denmark is not mandatory. Danish companies that plan to reach this level of turnover should register for VAT no later than 8 days before the start of actual operations. If a company's revenue exceeds DKK 50,000 and it does not yet have VAT registration, it must do so as soon as possible. Otherwise, the company risks penalties for failing to meet its tax obligations. Once registered as a VAT taxpayer, the company will be required to regularly file VAT returns and comply with all related regulations and administrative obligations.

The obligation to register for VAT in Denmark arises in several key situations:
Importing goods to other EU countries through Denmark: Companies importing goods that are then transported to other EU countries must register for VAT in Denmark.
2. Trade in goods and provision of services in Denmark: If a business trades goods or provides services in Denmark, VAT registration is required.
3. Receiving reverse-charge services by non-VAT companies: Businesses that are not registered for VAT but receive reverse-charge taxable services must also register.
4. Organization of live events and provision of taxed services: Companies that organize live events or provide taxed services are required to register for VAT in Denmark, according to EU regulations.
5. Direct-to-consumer (B2C) sales by foreign companies: Foreign companies that engage in direct-to-consumer (B2C) sales in Denmark, exceeding the intra-Community sales limit and not using the One-Stop Shop (OSS) VAT system, must register for VAT in Denmark.

Foreign companies can fulfill their obligation to register for VAT in Denmark by using the form available at virk.dk. It is also important to check whether a specific business outside Denmark that offers taxable goods or services will also need to register as a non-resident VAT payer. According to the EU's VAT directive, businesses from abroad must report all taxable transactions and account for the VAT amounts due, which entails registration. Once the registration process is complete, a Danish VAT number, known as a DK-nummer, will be sent to the designated mailing address.

In Denmark, the timing for VAT declarations is determined by a company's turnover. Businesses with a turnover exceeding 50,000,000 DKK are required to file VAT returns on a monthly basis, with submissions due by the 25th of the month following the end of the settlement period. For companies whose turnover ranges between 5,000,000 DKK and 50,000,000 DKK, VAT declarations must be submitted quarterly, specifically on the first day of the third month after the end of each quarter. Those with a turnover below 5,000,000 DKK need to file VAT returns semi-annually, aligning their submission deadlines with the quarterly reporting dates.

Unlike many other EU countries, Denmark does not implement any intermediate reduced VAT rate. Denmark features two VAT rates: a standard rate and a zero rate. The standard VAT rate in Denmark is 25%, which applies to all goods and services not qualifying for the zero rate. While the VAT system in Denmark remains uniform without reduced rates, certain goods and services benefit from a 0% VAT rate, which is unusual compared to other EU nations. This zero rate is applied to several sectors, including newspapers and magazines published more frequently than monthly, and international and intra-community transportation of goods and people.

VAT representative in Denmark

Foreign companies have the opportunity to enter the Danish market through tax representation in Denmark, eliminating the need to invest in setting up a local corporate structure and managing separate accounting procedures. In this way, they avoid the costs and complex formalities associated with physically establishing a business in Denmark. Danish tax representation also allows simplification of VAT procedures, making it easier to manage tax liabilities. In addition, this form of business allows quick access to local markets and better compliance with regulations, without the need for a physical presence in the country.

To operate in Denmark, non-European companies must use the services of a Danish VAT representative, since direct VAT registration in Denmark is not possible. Such a representative represents the outside company in its dealings with the Danish tax authorities. They are responsible for ensuring full compliance with VAT requirements, including those that may not be known to the customer. By appointing a fiscal representative, the outside company avoids the obligation to pay corporate tax. The use of vat representation services not only makes it possible to comply with legal requirements, but is also a simpler and more economical alternative compared to setting up a physical presence in the form of a branch or subsidiary.

In Europe, companies do not have to appoint a fiscal representative located in Denmark, but have the option of delegating an agent to handle tax matters with local authorities, which simplifies their cooperation. In such cases, a bank guarantee is not required. Nonetheless, the responsibility for proper VAT accounting rests entirely with the company.

Before a VAT representative agrees to represent your interests, they may require you to provide financial security, such as a deposit or bank guarantee. Such measures are designed to protect the representative from potential risks associated with improper tax settlements. In addition, financial security can also facilitate smoother representation procedures while providing greater certainty regarding the coverage of potential tax liabilities.

Working with non-European companies that do not have a danish fiscal representative often faces difficulties due to risk concerns. Suppliers, customers and trading platforms from Europe regularly choose to refuse to work with such entities, considering the lack of a local agent to be too much of an unknown for their business.

In addition, the lack of a tax representative located in Denmark can lead to serious problems, such as severe penalties imposed by the Danish tax authority. Companies without a proper representative may also face difficulties in claiming VAT refunds, which can put a significant strain on their finances and affect their operational liquidity. Therefore, having a local agent is essential to ensure tax compliance and effectively manage VAT-related costs.

Benefits of having a Danish VAT representative

Fiscal representation in Denmark has many benefits beyond simply registering a foreign supplier.
- The tax representative assumes responsibility for part of the VAT settlements related to the movement of goods.
- Foreign suppliers can take advantage of the reverse-charge mechanism on imports, which is made possible by appointing a Danish tax representative.
- Reduction of the number of VAT handling duties and administrative costs.
- The tax representative located in Denmark acts as an agent for the foreign supplier, ensuring that their rights and obligations are respected.
- It is possible not only to reduce costs, but also to deliver goods faster to customers in Europe.
- Streamlining logistics and administrative processes.

- The Danish VAT representative ensures accurate and timely VAT filings, reducing the risk of errors and non-compliance, which could lead to fines or audits.

- A Danish tax representative can provide valuable insights into local market conditions and regulatory changes, helping businesses adapt quickly and maintain compliance.
- Having a local representative enhances the credibility of a foreign business in the eyes of Danish tax authorities, potentially leading to smoother interactions and quicker resolutions of any issues.
- The Danish VAT representative can handle all communications with local tax authorities, mitigating language barriers and ensuring that all correspondence is accurately understood and addressed.
- With a local representative managing VAT-related tasks, foreign businesses can reduce their administrative burden, freeing up resources to focus on growth and other strategic priorities.
- The representative’s expertise in handling cross-border VAT issues ensures that transactions are processed efficiently, avoiding delays or complications that could affect supply chains.
- By delegating VAT responsibilities to a Danish tax representative, businesses can better manage risks associated with international trade, such as compliance failures or unexpected tax liabilities.

These and many other reasons are why an increasing number of foreign companies are choosing to take advantage of fiscal representation in Denmark. By doing so, they can ensure compliance with local regulations, streamline their VAT processes, reduce administrative burdens, and enhance their market presence in Europe. This strategic decision not only optimizes their operations but also positions them for long-term success in a competitive global market.

Services offered by a tax representative in Denmark

The fiscal representative offers a number of services that are essential for the proper functioning of the company's tax obligations. First and foremost, they are responsible for bookkeeping, which includes recording all the company's financial transactions, both sales and purchases. It is also crucial to maintain complete records and archive invoices and other relevant documents that may be needed during an inspection or audit. In addition, the Danish tax representative prepares financial reports that help analyze the company's operations and verify its compliance with tax requirements.

In terms of filing VAT reports and fees, the representative calculates the VAT due, taking into account the applicable rates. They are also responsible for preparing and filing the required VAT returns within the appropriate deadlines and for making payments to the tax authorities, thus ensuring timely payment of tax liabilities.

Another important task is to ensure compliance with local invoicing regulations. The representative verifies the accuracy of invoices issued, making sure they meet all local formal requirements. Also, they monitor changes in invoicing regulations to avoid errors and possible sanctions. They also support employees on invoicing best practices and VAT-related regulations.

Finally, the fiscal representative located in Denmark ensures that the company's operations comply with local VAT regulations. They monitor changes in tax regulations so that the company can adjust its practices in a timely manner. Danish tax representative regularly conducts internal audits to check compliance and identify potential areas of risk. It also offers compliance support, providing advice and recommendations, especially in cases of doubts or disputes with tax authorities.

Legal basis for VAT representation in Denmark

Danish VAT representation is regulated primarily by national VAT legislation, which implements the EU VAT Directive into Danish law. The rules define when a foreign business must appoint a VAT representative in Denmark, what responsibilities this representative has, and how the cooperation with the Danish Tax Agency (Skattestyrelsen, often still referred to as SKAT) should be organised.

Main legal framework for VAT representation

The obligation and conditions for appointing a VAT representative in Denmark stem from:

• Danish VAT legislation implementing the EU VAT Directive (Council Directive 2006/112/EC)
• Specific provisions on VAT registration and representation for foreign businesses without a fixed establishment in Denmark
• Administrative guidelines and binding practices issued by the Danish Tax Agency

Under this framework, Denmark may require non-EU businesses to appoint a VAT representative as a condition for obtaining a Danish VAT number, while EU-established companies are generally not obliged to do so.

When a VAT representative is legally required

According to Danish VAT rules, a VAT representative is typically required when:

• The business is established outside the EU and carries out taxable supplies in Denmark that require Danish VAT registration
• The business does not have a fixed establishment, branch or permanent presence in Denmark that can handle VAT compliance

Examples of activities that may trigger a mandatory VAT representative requirement for non-EU companies include:

• Domestic supplies of goods in Denmark
• Installation or assembly of goods in Denmark
• Holding stock in Denmark for local sales (including consignment or call-off stock)
• Certain B2C services where VAT is due in Denmark and not reported via special EU schemes (OSS/IOSS)

Joint and several liability under Danish law

Danish legislation provides that a VAT representative is jointly and severally liable with the foreign business for Danish VAT, interest and certain penalties arising from the represented activities. This means the Danish Tax Agency can recover unpaid VAT directly from the representative if the foreign company does not fulfil its obligations.

Because of this extended liability, the law allows VAT representatives to request security (for example, a bank guarantee or deposit) from the foreign business, especially where the expected VAT turnover is high or the risk profile is elevated.

Registration and notification requirements

When a VAT representative is appointed, Danish rules require that:

• The representative is established in Denmark and registered for VAT
• The appointment is formally notified to the Danish Tax Agency as part of the VAT registration process
• The representative’s details (name, address, Danish CVR/VAT number) are linked to the foreign company’s Danish VAT registration

The representative must ensure that VAT returns, EC Sales Lists (if applicable), and other mandatory reports are filed within the statutory Danish deadlines, and that VAT is paid in Danish kroner to the correct tax account.

Interaction with EU rules and special schemes

Danish VAT representation rules are aligned with EU legislation. For EU-established companies, the general principle of freedom to provide services within the EU means that Denmark cannot normally require a VAT representative. Instead, these businesses can register directly with the Danish Tax Agency.

For cross-border B2C supplies of services and goods covered by the One Stop Shop (OSS) or Import One Stop Shop (IOSS) schemes, EU regulations allow non-EU businesses to appoint an intermediary in another Member State rather than a Danish VAT representative. However, when a non-EU company chooses to register directly for Danish VAT instead of using OSS/IOSS, Danish national rules on VAT representation apply in full.

Compliance obligations defined by law

Under Danish VAT law, the VAT representative must, on behalf of the foreign company:

• Ensure correct VAT registration and maintenance of registration data
• Issue VAT-compliant invoices following Danish invoicing rules
• Apply the correct Danish VAT rate (currently 25% standard rate, with no reduced VAT rates)
• Keep accounting records and documentation in line with Danish bookkeeping and retention requirements
• Submit periodic VAT returns and pay VAT by the statutory deadlines, which depend on turnover and registration type
• Cooperate with the Danish Tax Agency during audits, inspections and information requests

Sanctions and enforcement

Danish law provides for financial penalties, interest and potential surcharges if VAT obligations are not met. Where a VAT representative is required but not appointed, or where the representative fails to fulfil its duties, the Danish Tax Agency may:

• Assess VAT based on estimated turnover
• Impose fines and late-payment interest
• Hold the representative jointly liable for unpaid VAT and related charges
• Restrict or cancel the foreign company’s Danish VAT registration in serious cases

Understanding this legal framework is essential for any foreign business planning to operate in Denmark, as proper VAT representation is a key condition for compliant and risk-free activity on the Danish market.

When is voluntary appointment of a VAT representative recommended?

Even when Danish law does not formally require you to appoint a VAT representative, using one can be highly beneficial. A voluntary VAT representative can reduce compliance risk, improve communication with the Danish Tax Agency (Skattestyrelsen) and help you optimise your VAT position when trading in Denmark.

Foreign businesses with limited knowledge of Danish rules

Voluntary appointment is particularly recommended if your company:

• Is newly entering the Danish market and has no prior experience with Danish VAT rules
• Does not have Danish- or English-speaking staff familiar with local tax practice
• Has internal accounting teams that are used to other EU systems and need support adapting to Danish specifics (e.g. reporting deadlines, invoice requirements, digital communication with Skattestyrelsen)

A local VAT representative monitors changes in Danish VAT legislation, practice and guidance, helping you avoid errors that could lead to assessments, interest and penalties.

Businesses close to Danish VAT thresholds

Even if you are not yet registered for VAT in Denmark, it may be sensible to work with a VAT representative when you are approaching Danish thresholds, for example:

• Distance sales of goods to Danish consumers under the EU OSS scheme, when you are close to the EU-wide EUR 10,000 threshold for B2C cross-border sales
• Regular supplies of services to Danish customers where the place of supply is Denmark
• Frequent imports of goods into Denmark followed by local supplies

A representative can monitor your turnover, determine when Danish VAT registration becomes mandatory and prepare the registration in advance so that you do not miss the start date and incur late-registration liabilities.

Companies with complex or high-volume transactions

Voluntary VAT representation is strongly recommended if you have:

• Complex supply chains involving multiple EU countries and Denmark (triangulation, consignment stock, call-off stock)
• Regular intra-Community acquisitions and supplies involving Danish VAT numbers
• High-volume B2C sales to Danish customers (e-commerce, subscriptions, platforms)
• Frequent corrections, credit notes or returns that complicate VAT reporting

In such cases, a VAT representative helps structure transactions correctly, ensures proper documentation and reduces the risk of underpaid or overpaid VAT.

E-commerce, marketplaces and digital services

Online sellers and platforms often benefit from a voluntary VAT representative in Denmark, especially when:

• You sell goods online to Danish consumers and use fulfilment centres or warehouses in Denmark
• You operate through electronic interfaces (marketplaces, platforms) that may be deemed the supplier for VAT purposes
• You provide digital services, apps, streaming, software or online platforms to Danish consumers under the OSS scheme

A representative can help you decide whether to use Danish VAT registration, OSS or IOSS, set up correct VAT rates (standard 25% VAT in Denmark) in your systems and ensure that invoices and records meet Danish requirements.

Businesses expecting audits or increased scrutiny

If you anticipate a higher risk of VAT control, a voluntary VAT representative can be a strategic safeguard. This applies in particular when:

• You have had inconsistencies or corrections in previous Danish VAT returns
• You operate in sectors with higher audit frequency (e.g. construction, logistics, online trade)
• You have significant input VAT to recover and large VAT refunds are expected from Skattestyrelsen

Your representative can prepare documentation in advance, respond to queries from the Danish Tax Agency, attend meetings and help defend your VAT position during audits or inspections.

Companies without a permanent establishment in Denmark

Foreign entities operating in Denmark without a permanent establishment often face practical challenges, even when a VAT representative is not legally required. Voluntary appointment is advisable if:

• You have temporary projects in Denmark (construction, installation, assembly)
• You send employees to Denmark for services and need to handle both VAT and related obligations
• You invoice Danish customers regularly but manage accounting from another country

A VAT representative acts as a local point of contact, helps with Danish e-Boks communication, keeps deadlines for periodic VAT returns and ensures that your Danish VAT number remains in good standing.

Groups seeking VAT optimisation and risk management

International groups that operate in several EU countries often appoint VAT representatives voluntarily to centralise and standardise compliance. This is recommended when you:

• Want consistent VAT treatment across subsidiaries and branches trading with Denmark
• Plan restructurings, mergers or changes in supply chains involving Danish entities
• Need regular VAT health checks and risk assessments for your Danish activities

A Danish VAT representative can review contracts, pricing models and logistics flows to identify VAT risks and opportunities, for example correct application of exemptions, reverse charge mechanisms and place-of-supply rules.

When internal resources are limited

Finally, voluntary appointment is often the most efficient solution when your internal finance team:

• Is small and already overloaded with domestic compliance
• Does not have the capacity to follow Danish legislative updates and guidance
• Wants to outsource routine VAT tasks (returns, EC Sales Lists, Intrastat, corrections)

By delegating Danish VAT obligations to a representative, you reduce the risk of missed deadlines, incorrect filings and communication problems with the Danish Tax Agency, while freeing internal resources for core business activities.

Tax representation for non-EU companies vs. EU-established companies

Tax representation rules in Denmark differ significantly depending on whether the company is established in an EU Member State or outside the EU. The key distinction concerns the obligation to appoint a Danish VAT representative, the scope of liability, and the practical level of scrutiny from the Danish Tax Agency (Skattestyrelsen).

Non-EU companies – when VAT representation is usually mandatory

Businesses established outside the EU that carry out taxable activities in Denmark are in many cases required to appoint a Danish VAT representative. This obligation typically arises when a non-EU company:

• makes taxable supplies of goods or services in Denmark that are not fully covered by reverse charge,
• holds stock in Denmark for local sales or for distance sales to Danish customers,
• imports goods into Denmark and sells them locally,
• runs e-commerce operations directed at Danish consumers (B2C), outside EU special schemes such as OSS/IOSS.

The VAT representative for a non-EU company is usually jointly and severally liable with the foreign business for Danish VAT, interest and certain penalties. Because of this extended liability, Danish representatives often require:

• detailed information about the company’s structure and activities,
• copies of incorporation documents and tax registrations from the home country,
• security deposits or bank guarantees in higher-risk cases or for high transaction volumes.

Non-EU companies that use the Import One Stop Shop (IOSS) for low-value consignments (up to EUR 150) to Danish consumers generally do not need a separate Danish VAT registration for those specific sales, but may still need a Danish VAT number and representative for other local activities (for example, warehousing in Denmark).

EU-established companies – when representation is optional

Companies established in another EU Member State benefit from the principle of freedom of establishment and mutual assistance between tax administrations. As a result, an EU business that must register for VAT in Denmark can usually do so without appointing a VAT representative.

Typical situations where an EU-established company must obtain a Danish VAT number include:

• holding stock in Denmark for local sales or call-off stock arrangements,
• performing installation or assembly services in Denmark,
• organising events, fairs or conferences in Denmark with taxable admission fees,
• distance sales to Danish consumers exceeding the EU-wide threshold of EUR 10,000 annually, if the company does not use the OSS scheme and instead opts for local Danish registration.

Although a VAT representative is not normally mandatory for EU businesses, many companies still appoint one voluntarily to handle Danish VAT compliance, communication with Skattestyrelsen and ongoing monitoring of regulatory changes.

Key differences in obligations and risk

The main practical differences between non-EU and EU-established companies in the context of Danish tax representation are:

• Obligation to appoint a representative
  Non-EU: often mandatory when carrying out taxable activities in Denmark that require local VAT registration.
  EU: generally optional; direct registration is usually allowed.
• Liability of the representative
  Non-EU: the Danish VAT representative is typically jointly and severally liable for VAT and related charges.
  EU: where a representative is used voluntarily, the contract can limit commercial responsibility, although the foreign company always remains legally liable for VAT.
• Compliance expectations
  Non-EU: higher level of scrutiny, more extensive documentation, and sometimes a requirement for financial security.
  EU: standard documentation and risk assessment, with fewer formal barriers to registration.
• Access to EU simplification schemes
  Non-EU: may need an EU intermediary for IOSS and often a Danish representative for local activities outside EU schemes.
  EU: can use OSS/IOSS directly from the Member State of establishment, reducing the need for multiple local VAT registrations, including in Denmark.

Choosing between direct registration and VAT representation

For EU-established companies, the decision is mainly strategic: whether to manage Danish VAT obligations internally or to outsource them to a local specialist. For non-EU companies, the question is usually not whether a representative is needed, but which Danish VAT representative to appoint and under what terms.

In both cases, working with an experienced Danish tax representative can reduce the risk of:

• incorrect VAT treatment of cross-border transactions,
• late or incorrect VAT returns and payments,
• penalties for non-compliance or incomplete registrations,
• misunderstandings in communication with the Danish Tax Agency.

Understanding the different rules for non-EU and EU-established companies is essential for planning a compliant and efficient entry into the Danish market.

Danish VAT compliance process step by step (from registration to filing)

Danish VAT compliance is a continuous process that starts before you make your first taxable sale in Denmark and continues as long as you are registered. Below is a practical, step-by-step overview of how VAT compliance typically looks in Denmark, from registration to filing and payment.

1. Assessing the need for Danish VAT registration

The first step is to determine whether your activities trigger a VAT registration obligation in Denmark. In general, you must register for VAT if you:

• Carry out taxable supplies of goods or services in Denmark on a regular basis
• Import goods into Denmark and act as the importer of record
• Hold stock in Denmark for local sales or for distance sales to Danish customers
• Organise events, fairs or conferences in Denmark and charge admission

For foreign businesses supplying goods to Danish private consumers via distance sales (e.g. e-commerce), the EU-wide distance sales threshold of EUR 10,000 per year applies when using the OSS scheme. Above this level, VAT is due in the customer’s country, including Denmark. For businesses not using OSS, local Danish registration may be required earlier, depending on the supply chain and contractual arrangements.

2. Choosing the correct VAT registration route

Once you know that you need to register, you must choose how to register:

• Direct registration in Denmark – available to EU-established businesses and, in some cases, to non-EU businesses that appoint a Danish VAT representative where required.
• Registration via a Danish VAT representative – often mandatory for non-EU entities that are required to be VAT registered in Denmark and do not have a fixed establishment in the EU.
• Registration via EU OSS / IOSS schemes – for cross-border B2C supplies of services and goods, where you may account for Danish VAT through a single EU return instead of a local Danish registration, provided the conditions are met.

The choice of route affects your reporting obligations, the type of returns you file and the interaction with the Danish Tax Agency (SKAT).

3. Preparing documentation for VAT registration

Before submitting a registration application, you must gather the required documents and information. Typically, SKAT will require:

• Company identification details (legal name, address, contact details)
• Incorporation documents and trade register extract from the country of establishment
• VAT number in the country of establishment (if applicable)
• Information about the planned activities in Denmark (type of supplies, expected turnover, customers)
• Details of any fixed establishment or warehouse in Denmark
• Bank account details for VAT refunds and payments
• Power of attorney for the Danish VAT representative, if appointed

All information must be consistent and up to date. Incomplete or inconsistent documentation is a common reason for delays in obtaining a Danish VAT number.

4. Submitting the VAT registration to SKAT

The registration is submitted electronically to SKAT. For foreign businesses, this is usually done by a tax representative or local advisor. During the registration process, SKAT may ask for additional explanations or documents to clarify the nature of your activities and to assess whether a VAT representative is required.

Once the application is approved, SKAT assigns a Danish VAT number (CVR/SE number) and confirms the effective date of registration. From that date, you must charge Danish VAT where applicable and comply with Danish VAT rules.

5. Setting up invoicing and accounting in line with Danish rules

After registration, you must adapt your invoicing and accounting systems to Danish requirements. Key elements include:

• Issuing invoices that contain all mandatory details (supplier and customer identification, VAT number, invoice date, description of goods/services, VAT rate and amount, total payable)
• Applying the correct Danish VAT rate:
  • Standard VAT rate: 25% on most goods and services
  • Zero-rated supplies: for example, certain international transport and exports
  • Exempt supplies: for example, many financial and insurance services, certain healthcare and education services
• Recording all sales and purchase transactions in a way that allows clear identification of Danish VAT
• Ensuring that your ERP or accounting software can generate VAT reports according to Danish requirements

Correct invoicing is essential, as errors can lead to denied input VAT deductions, additional assessments and penalties.

6. Determining VAT periods and deadlines

In Denmark, the frequency of VAT returns depends mainly on your annual turnover:

• Small businesses: typically semi-annual VAT returns
• Medium-sized businesses: quarterly VAT returns
• Large businesses: monthly VAT returns

SKAT assigns the reporting frequency when you register and may change it if your turnover increases or decreases. Each VAT period has a fixed filing and payment deadline after the end of the period. Missing these deadlines can result in interest and penalties, so it is crucial to implement an internal calendar and reminders.

7. Ongoing bookkeeping and VAT control

Throughout each VAT period, you must maintain accurate and complete records. This includes:

• Sales invoices and credit notes
• Purchase invoices and import documents
• Customs declarations for imports and exports
• Contracts and agreements relevant to the VAT treatment

Regular internal VAT reviews help identify issues such as incorrect VAT rates, missing invoices, or misclassified transactions. A Danish VAT representative or local accountant can assist in performing these checks and ensuring that your records meet SKAT’s expectations.

8. Calculating Danish VAT payable or refundable

At the end of each VAT period, you must calculate your VAT position. The basic formula is:

Output VAT (on sales) – Input VAT (on purchases and imports) = VAT payable or VAT refund

Key points to consider include:

• Only VAT that is correctly invoiced and related to taxable business activities is deductible
• VAT on certain expenses (for example, some entertainment costs) may be partially or fully non-deductible
• Imports and intra-Community acquisitions must be included in the VAT calculation according to Danish rules

If the result is positive, you owe VAT to SKAT. If it is negative, you are entitled to a VAT refund, which SKAT will pay to your bank account after review.

9. Preparing and filing the Danish VAT return

The VAT return is filed electronically via SKAT’s online system. The return summarises your taxable turnover, exempt turnover, output VAT, input VAT and any special adjustments. For businesses using a VAT representative, the representative usually prepares and submits the return on your behalf, based on the accounting records you provide.

Before submission, it is important to reconcile the figures in the VAT return with your general ledger and sales reports. Discrepancies may trigger questions from SKAT or a VAT audit.

10. Paying VAT or receiving a refund

If the VAT return shows VAT payable, you must transfer the amount to SKAT by the statutory deadline for that period. Late payment leads to interest and possible surcharges. Payment is usually made via bank transfer using the reference details provided by SKAT.

If the return shows a refund, SKAT will normally process the refund after basic checks. In some cases, especially for large refunds or new registrations, SKAT may request additional documentation before releasing the funds.

11. Correcting errors and submitting adjustments

If you discover an error after filing a VAT return, you must correct it. In Denmark, this is usually done by submitting an adjusted VAT return for the affected period or by including the correction in a later period, depending on the size and nature of the error and SKAT’s guidance.

Prompt voluntary correction generally reduces the risk of penalties. A Danish VAT representative can help assess the best way to correct past periods and communicate with SKAT if necessary.

12. Record-keeping and readiness for VAT audits

Danish VAT rules require that accounting records and supporting documents are kept for a number of years, allowing SKAT to verify the correctness of your VAT returns. Records must be accessible in Denmark and provided to SKAT upon request, either electronically or in paper form.

SKAT may carry out desk audits or on-site inspections. During such audits, your VAT representative can act as the main contact, provide explanations, and help defend your VAT position. Proper documentation and a clear audit trail significantly reduce the risk of adjustments and penalties.

By following these steps and maintaining a structured VAT compliance process, foreign and Danish businesses can operate in Denmark with confidence, minimise VAT risks and ensure smooth cooperation with the Danish Tax Agency. A professional Danish VAT representative can support you at each stage, from registration to filing and dealing with audits.

Responsibilities and liabilities of the Danish VAT representative

The Danish VAT representative acts as the main point of contact between your company and the Danish Tax Agency (Skattestyrelsen). Their responsibilities and liabilities are strictly regulated and, in many situations, they share or even assume your VAT obligations in Denmark. Understanding this division of duties is crucial when entering the Danish market.

Core responsibilities of a Danish VAT representative

A VAT representative in Denmark is responsible for ensuring that your company complies with all Danish VAT rules from the moment of registration until deregistration. In practice, this usually includes:

• Assessing whether and when your company has an obligation to register for Danish VAT (for example due to local supplies of goods, installation services, warehousing or distance sales to Danish customers)
• Preparing and submitting the VAT registration to Skattestyrelsen, including obtaining a Danish VAT number (CVR/SE number)
• Monitoring applicable VAT rates (standard 25% VAT, and any specific exemptions or zero-rated transactions) and applying them correctly to your supplies
• Preparing and filing periodic VAT returns within the statutory deadlines, based on the company’s turnover and assigned reporting frequency
• Submitting EC Sales Lists (if applicable) and other required VAT-related reports
• Ensuring correct treatment of imports, exports and intra-Community acquisitions in the VAT returns
• Advising on invoicing requirements, including mandatory invoice content, currency, and VAT disclosure
• Maintaining and, where agreed, storing VAT records and supporting documentation in line with Danish retention rules
• Monitoring changes in Danish VAT legislation and practice and informing the company about necessary adjustments
• Acting as the official contact person for Skattestyrelsen in all VAT-related matters

Liability for VAT and other tax obligations

In many cases, a Danish VAT representative is jointly and severally liable with the foreign company for VAT due in Denmark. This means that if the company fails to pay VAT, Skattestyrelsen may claim the outstanding amount directly from the representative, within the limits set by Danish law and the representation agreement.

The representative’s liability typically covers:

• Correct calculation of output VAT and input VAT deductions
• Timely payment of VAT to Skattestyrelsen
• Interest and surcharges arising from late payment or incorrect reporting, where the representative has been responsible for the filings

Because of this potential financial exposure, Danish VAT representatives usually require detailed information about your transactions and may ask for guarantees, deposits or other security, especially when representing non-EU businesses or companies with high turnover or complex supply chains.

Obligation to ensure accurate and timely reporting

The representative must make sure that VAT returns and other declarations are filed on time and are based on complete and accurate data. Depending on the company’s turnover, Danish VAT returns are generally filed monthly, quarterly or half-yearly. The representative is responsible for:

• Collecting transaction data (sales, purchases, imports, exports, intra-EU movements) in a format that allows correct VAT treatment
• Reconciling accounting records with VAT returns to reduce the risk of discrepancies
• Monitoring filing deadlines and payment dates and informing the company about upcoming obligations
• Correcting errors through supplementary or amended VAT returns when necessary

If the company does not provide the required information in time, the representative must typically document this and may limit their liability in accordance with the service contract. However, they still have a duty to cooperate with the tax authorities and to mitigate potential non-compliance where possible.

Communication and cooperation with Skattestyrelsen

The Danish VAT representative is authorised to communicate with Skattestyrelsen on behalf of your company. This includes:

• Receiving official correspondence, decisions and requests for information
• Responding to queries and providing explanations regarding VAT returns and transactions
• Handling registrations, changes in company details and deregistration procedures
• Managing applications for VAT refunds or adjustments

The representative must ensure that all communication with the authorities is accurate, consistent and timely. They are also expected to inform you promptly about any decisions, deadlines or risks that may affect your tax position in Denmark.

Role in audits, inspections and disputes

When Skattestyrelsen initiates a VAT audit or inspection, the representative plays a central role. Their responsibilities usually include:

• Coordinating the audit process and acting as the primary contact for the tax inspectors
• Preparing and presenting requested documentation, such as invoices, contracts, transport documents and accounting records
• Explaining the business model, supply chains and VAT treatment of specific transactions
• Supporting the company in negotiations, clarifications and potential dispute resolution
• Assisting in the implementation of any corrections or adjustments ordered by Skattestyrelsen

If the audit results in additional VAT assessments, interest or penalties, the extent to which the representative is financially liable will depend on Danish law and the contractual arrangements with the company. Nevertheless, they are expected to help minimise the impact by ensuring that the company’s rights are respected and that any appeal options are considered.

Data, documentation and confidentiality duties

A Danish VAT representative must handle your company’s data and documentation with care and in accordance with Danish and EU data protection rules. Their duties typically cover:

• Collecting and storing VAT-related documents for the required retention period
• Ensuring that records are complete enough to substantiate VAT returns and withstand a tax audit
• Protecting confidential business information and limiting access to authorised staff
• Using secure channels for data exchange and communication with both the company and Skattestyrelsen

Limitations of the representative’s role

Although the Danish VAT representative has extensive responsibilities, they do not replace the company’s overall management or strategic tax planning. The foreign company remains ultimately responsible for:

• Providing accurate and complete information about its activities in Denmark
• Informing the representative about changes in business model, supply chains or contractual terms that may affect VAT treatment
• Approving filings and payments where this is required by the service agreement

The exact allocation of tasks and liabilities should always be clearly defined in a written agreement. A well-structured contract helps both parties understand their obligations, reduces the risk of misunderstandings and ensures that Danish VAT compliance is handled efficiently and securely.

Required documentation and information to appoint a VAT representative

To formally appoint a VAT representative in Denmark, foreign businesses must provide a clear set of corporate and tax documents. The Danish Tax Agency (Skattestyrelsen / SKAT) uses this information to verify the identity of the taxable person, assess the need for representation and register the representative as jointly and severally liable for Danish VAT. Incomplete or inconsistent documentation is one of the most common reasons for delays in obtaining a Danish VAT number.

Core company identification documents

The starting point is proof that your business legally exists and is properly registered in its country of establishment. Typically, SKAT will require:

• Certificate of incorporation or extract from the commercial register (e.g. Companies House, Handelsregister, Chamber of Commerce), showing the company’s legal name, registration number, legal form and date of incorporation
• Articles of association or statutes, confirming the company’s legal structure and scope of activity
• Up-to-date certificate of good standing or equivalent document, if available in the country of establishment
• Official VAT or tax identification number in the country of establishment (if the business is VAT-registered there)
• Registered office address and, if different, principal place of business

For sole traders, SKAT may request a business registration certificate, proof of entry in a trade register and a copy of the owner’s identification document instead of corporate documents.

Identification of owners and authorised signatories

Because the VAT representative assumes joint and several liability, Danish authorities require transparency regarding who controls and represents the foreign business. In practice this means:

• List of directors and persons authorised to sign on behalf of the company
• Copies of valid identification documents (passport or national ID) for directors and authorised signatories
• Information on ultimate beneficial owners (UBOs), usually any individual holding directly or indirectly more than 25% of shares or voting rights
• Organisational chart, if the ownership structure is complex or involves holding companies

Where relevant, SKAT may also request information related to anti–money laundering (AML) and “know your customer” (KYC) checks carried out by the Danish VAT representative.

Power of attorney and representation agreement

A VAT representative can only act before SKAT if they are formally authorised. Two documents are typically required:

• Power of attorney (PoA) – signed by an authorised signatory of the foreign company, explicitly empowering the Danish representative to:
  • register the company for Danish VAT
  • submit VAT returns, EC Sales Lists (if applicable) and other statutory reports
  • receive and respond to correspondence from SKAT
  • represent the company during audits and inspections
• VAT representation agreement – a private contract between the foreign business and the Danish representative, setting out:
  • scope of services (registration, filings, advisory, communication with SKAT)
  • responsibilities of each party, including data provision and deadlines
  • liability clauses, especially regarding joint and several liability for Danish VAT
  • fees, billing model and notice periods for termination

SKAT may request a copy of the signed PoA and, in some cases, an extract of the representation agreement to confirm the representative’s mandate.

Business activity description and transaction details

To assess VAT registration obligations and determine the correct VAT treatment, the Danish Tax Agency requires a detailed description of the planned or ongoing activities in Denmark. Typically you should provide:

• Clear description of products and/or services supplied in Denmark (including CN codes for goods, where relevant)
• Information on whether supplies are B2B, B2C or both
• Expected annual turnover in Denmark, broken down by type of transaction (domestic sales, intra-Community supplies, exports, distance sales, digital services)
• Information on whether you hold or plan to hold stock in Denmark (own warehouse, consignment stock, fulfilment centre, 3PL, marketplace warehouse)
• Details of any fixed establishment in Denmark or confirmation that no fixed establishment exists
• Information on the use of EU schemes such as OSS, IOSS or non-Union OSS for digital services

For businesses already active in Denmark, SKAT may also request historical data on previous sales, invoices and VAT treatment to verify that the registration date and VAT position are correct.

Bank and payment information

To process VAT payments and refunds, SKAT and the VAT representative need reliable banking details. Usually the following information is required:

• Bank account holder name (must match the legal name of the company or group entity responsible for VAT)
• IBAN and BIC/SWIFT code for international transfers
• Confirmation of the currency of the account (Danish krone – DKK – or foreign currency)
• Bank address and, if requested, a recent bank statement or bank letter confirming the account details

Some Danish VAT representatives may require the client to maintain a dedicated account or pre-funding arrangement to ensure timely payment of VAT and other tax liabilities.

Documentation specific to non-EU businesses

Non-EU companies are more frequently required to appoint a VAT representative in Denmark and are often subject to stricter documentation checks. In addition to the documents listed above, SKAT or the representative may request:

• Proof that the company is not established in any EU Member State (e.g. confirmation from tax authorities or commercial register)
• Evidence of tax registration in the country of establishment
• Certificates of tax residency issued by local tax authorities
• Additional AML/KYC documentation, especially if the business operates in higher-risk sectors or jurisdictions

In some cases, the Danish VAT representative may also ask for financial statements to assess the company’s solvency, as they are jointly and severally liable for Danish VAT debts.

Language, form and legalisation requirements

Foreign documents submitted to SKAT must meet Danish formal requirements. As a rule:

• Documents in Danish, English, Norwegian or Swedish are generally accepted without translation
• Documents in other languages usually require a certified translation into Danish or English
• For certain corporate documents (e.g. certificate of incorporation, PoA), SKAT or the representative may request an apostille or consular legalisation, depending on the issuing country
• Copies of IDs and corporate documents must be clear and legible; some may need to be notarised

Your Danish VAT representative will typically indicate which documents must be provided in original, which can be scanned copies and when legalisation is necessary.

Information needed for the Danish VAT registration form

When the representative submits the VAT registration to SKAT, they must complete a detailed electronic form. To do this, they will ask you for:

• Exact legal name of the business and any trading names used in Denmark
• Foreign VAT/tax number and EORI number, if available
• Date on which taxable activities in Denmark started or are expected to start
• Estimated annual Danish turnover and expected monthly or quarterly sales volumes
• Preferred VAT reporting frequency, if options are available based on turnover
• Contact person for VAT matters (name, email, phone), both at the foreign company and at the representative

Providing accurate and consistent information at this stage reduces the risk of later corrections, audits or penalties for incorrect registration.

Internal records and ongoing data provision

Appointing a VAT representative is not a one-off action. To ensure continuous compliance with Danish VAT rules, your representative will require ongoing access to:

• Sales invoices and credit notes related to Danish transactions
• Purchase invoices and import documents (including customs declarations and import VAT assessments)
• Contracts with Danish customers, suppliers, logistics providers and marketplaces
• Evidence supporting VAT exemptions or zero-rating (e.g. transport documents for intra-Community supplies and exports)
• Records of distance sales thresholds and OSS/IOSS declarations, where relevant

These documents are not only needed to prepare accurate VAT returns, but also to respond quickly and effectively to any queries or audits from the Danish Tax Agency.

Practical tips for preparing documentation

To streamline the appointment of a Danish VAT representative and avoid delays:

• Prepare all corporate and identification documents in advance and check that they are up to date
• Ensure that company names, addresses and registration numbers are consistent across all documents
• Agree with your representative on the exact wording of the power of attorney before signing
• Provide a clear, written description of your business model and flows of goods and services involving Denmark
• Set up internal processes to share invoices and transaction data with the representative on a regular basis

Well-prepared documentation allows your Danish VAT representative to complete the registration process faster, reduce the risk of additional questions from SKAT and ensure that your activities in Denmark remain fully compliant with local VAT legislation.

Cooperation with the Danish Tax Agency (SKAT) through a tax representative

The Danish Tax Agency (Skattestyrelsen, often still referred to as SKAT) is the main authority supervising VAT registration, reporting and payment in Denmark. When you appoint a Danish tax representative, this entity becomes your official point of contact with the Tax Agency and handles most day-to-day communication on your behalf.

In practice, cooperation with the Danish Tax Agency through a tax representative covers three key areas: registration, ongoing compliance and potential audits or queries. The representative submits your VAT registration application, updates your company details in the Danish business register (CVR) and ensures that your VAT number is correctly activated for the relevant activities, such as domestic supplies, intra-Community transactions or imports.

On an ongoing basis, the tax representative prepares and files your periodic VAT returns via the online system of the Danish Tax Agency. In Denmark, VAT returns are usually submitted monthly, quarterly or half-yearly, depending on your turnover and the reporting frequency assigned by the authority. The representative calculates the VAT due at the standard rate of 25% and ensures that the correct amount is paid to the Danish Tax Agency by the statutory deadline. If you are entitled to VAT refunds, the representative also monitors the refund process and responds to any additional information requests from the authority.

All official correspondence from the Danish Tax Agency is sent to the address or electronic mailbox of your tax representative. This includes notifications about filing deadlines, reminders, decisions on VAT assessments, refund approvals or rejections, as well as information about changes in Danish VAT rules. The representative translates and explains the content of these letters, advises you on the necessary actions and submits any required clarifications or appeals within the prescribed time limits.

When the Danish Tax Agency initiates a control, review or targeted audit of your VAT position, the tax representative coordinates the entire process. This involves collecting and presenting invoices, contracts, import and export documents, Intrastat data and accounting records that support the figures reported in your VAT returns. The representative communicates directly with the tax officers, answers technical questions in Danish, and negotiates the scope and timing of the inspection to minimise disruption to your business operations.

Cooperation through a tax representative is especially important for non-resident and non-EU businesses that may not be familiar with Danish administrative practice. The representative ensures that your company complies not only with the formal VAT rules, but also with practical requirements of the Danish Tax Agency, such as correct invoice content, documentation for zero-rated exports, proof of transport for intra-Community supplies, and proper evidence for input VAT deduction.

If the Danish Tax Agency identifies discrepancies or late filings, your tax representative helps you correct the situation by submitting supplementary VAT returns, voluntary disclosures or correction letters. This proactive cooperation can significantly reduce the risk of penalties and interest, and in some cases may help demonstrate good faith and limit the financial consequences of errors.

Overall, working with the Danish Tax Agency through a tax representative gives foreign companies a structured and predictable framework for handling all VAT-related obligations in Denmark. It reduces the risk of misunderstandings caused by language barriers or unfamiliar procedures and allows you to focus on your core business, while your representative manages the relationship with the Danish tax authorities in a professional and compliant way.

Handling VAT audits and tax inspections with a Danish representative

VAT audits and tax inspections are a standard element of doing business in Denmark. The Danish Tax Agency (Skattestyrelsen / SKAT) regularly reviews foreign companies to verify correct VAT registration, reporting and payment. Having a Danish VAT representative significantly simplifies communication with the authorities and reduces the risk of costly mistakes.

A VAT audit may be triggered by discrepancies in VAT returns, unusually high input VAT refunds, late filings, cross-checks with Danish customers’ or suppliers’ declarations, or random selection. The tax authorities can review your Danish VAT compliance for several past years, typically up to the statutory limitation period, and may request detailed documentation for each period.

Role of the Danish VAT representative during an audit

Your VAT representative acts as the main point of contact for SKAT throughout the entire audit or inspection. This usually includes:

• Receiving and responding to official letters, information requests and deadlines set by SKAT
• Explaining your business model, supply chains and invoicing flows in a way that matches Danish VAT rules
• Preparing reconciliations between VAT returns, SAF-T or accounting data and underlying invoices
• Clarifying the VAT treatment of specific transactions (e.g. 25% standard rate, zero-rated exports, intra-Community supplies, reverse charge)
• Participating in meetings or calls with SKAT and representing your interests in Danish

The representative helps ensure that all information is complete, consistent and submitted on time. This reduces the likelihood of additional questions, extended audits or estimated assessments.

Documentation typically requested by SKAT

During a VAT audit, the Danish Tax Agency may ask for a wide range of documents, for example:

• Sales and purchase invoices for selected periods
• Contracts with Danish and foreign customers or suppliers
• Proof of transport for intra-Community supplies and exports outside the EU
• Import documents and customs declarations if goods enter Denmark or the EU
• VAT ledgers, general ledger, trial balance and bank statements
• Evidence supporting VAT exemptions or zero-rating

A Danish VAT representative helps you identify which documents are required under Danish practice, how they should be formatted and how to address any gaps (for example, missing transport evidence or incomplete invoice details).

Preparing for a VAT audit in Denmark

Proper preparation can significantly limit the scope and duration of a tax inspection. Together with your VAT representative, you should:

• Regularly reconcile VAT returns with accounting records and bank movements
• Check that invoices meet Danish and EU formal requirements (e.g. VAT number, correct VAT rate, reverse charge wording where applicable)
• Maintain clear documentation for distance sales, e-commerce, digital services and call-off stock arrangements
• Ensure that intra-Community supplies and exports are supported by transport and customs documents
• Monitor filing and payment deadlines for Danish VAT to avoid late-filing penalties and interest

A proactive review by your representative before any audit can identify typical risk areas, such as incorrect application of the reverse charge mechanism, misclassification of services, or failure to charge 25% Danish VAT on B2C sales to Danish customers when thresholds or OSS/IOSS rules require it.

Communication with the Danish Tax Agency

All formal communication with SKAT must follow Danish administrative procedures and is usually conducted in Danish. Your VAT representative:

• Translates and explains SKAT’s letters and requests
• Drafts responses that are technically accurate and aligned with Danish VAT legislation and practice
• Negotiates realistic deadlines for providing additional information when necessary
• Clarifies misunderstandings regarding your business activities or transaction flows

This professional communication helps avoid misinterpretation of your data and reduces the risk of SKAT applying estimated assessments or denying input VAT deductions.

Handling audit findings, corrections and appeals

If SKAT identifies errors, your VAT representative assists in assessing the impact and negotiating the outcome. This may involve:

• Submitting voluntary corrections for previous VAT periods
• Calculating additional VAT due or input VAT to be reclaimed
• Requesting offsetting of underpaid and overpaid VAT across periods, where permitted
• Explaining mitigating circumstances to reduce penalties and interest where possible
• Preparing objections or appeals if you disagree with SKAT’s decision

In Denmark, penalties and interest can apply for underpaid VAT, late filings or incomplete information. A VAT representative helps you understand the financial consequences of an audit result and supports you in choosing the most efficient and compliant way to regularise your position.

Benefits of using a Danish VAT representative during inspections

Working with an experienced Danish VAT representative during audits and tax inspections offers several practical advantages:

• Reduced administrative burden for your internal team
• Lower risk of language and procedural misunderstandings with SKAT
• Faster resolution of audits thanks to complete and well-structured documentation
• Better control over potential assessments, penalties and interest
• Improved long-term VAT compliance and internal processes

For foreign companies operating in Denmark, especially non-established businesses, having a local VAT representative is often the most effective way to manage VAT audits and tax inspections, protect your position before the Danish Tax Agency and ensure ongoing compliance with Danish VAT law.

Penalties and risks of operating in Denmark without required VAT representation

Operating in Denmark without a VAT representative when one is required exposes foreign businesses to significant financial and legal risks. Danish tax rules are strictly enforced, and the Danish Tax Agency (Skattestyrelsen, often still referred to as SKAT) actively monitors foreign traders supplying goods and services in Denmark.

Financial penalties for non-compliance

If a company is required to appoint a Danish VAT representative but fails to do so, the tax authorities may impose:

• Fines for late or missing VAT registration – these can apply from the moment the registration obligation arose, even if the company was unaware of the requirement.
• Interest and surcharges on unpaid VAT – VAT due is recalculated retroactively, with interest added for each reporting period where VAT was not correctly declared and paid.
• Penalties for late or incorrect VAT returns – if returns are filed late, incomplete or not filed at all, additional fixed fines and percentage-based penalties may be charged.

In practice, the total cost of retroactive VAT, interest and penalties can significantly exceed the original VAT liability, especially for businesses that have been active in Denmark for several years without proper representation.

Risk of retroactive VAT assessment

Without a Danish VAT representative, many foreign companies overlook their local obligations, for example:

• Charging Danish customers without Danish VAT when it should have been applied
• Not registering for VAT despite exceeding the relevant thresholds or carrying out taxable activities in Denmark
• Incorrectly treating supplies as outside the scope of Danish VAT

When the Danish Tax Agency discovers such situations, it may issue a retroactive VAT assessment. This means the company must pay VAT for past periods, even if it did not charge VAT to customers at the time. Recovering this VAT from customers afterwards is often impossible, so the cost is borne entirely by the business.

Liability risks and joint responsibility

For non-EU businesses, a Danish VAT representative is generally jointly and severally liable for the VAT obligations of the represented company. If a business operates without a required representative, the tax authorities may:

• Hold the foreign company directly liable for all unpaid VAT, interest and penalties
• Refuse to accept deductions of Danish input VAT if documentation and reporting are not in line with local rules
• Take enforcement measures against assets or receivables in Denmark, for example by contacting Danish customers or business partners

In serious or repeated cases of non-compliance, the authorities can also restrict the company’s ability to continue trading in Denmark until the situation is regularised.

Operational and reputational consequences

Operating without the required VAT representation can also have practical and reputational impacts:

• Delays in customs clearance and import procedures – missing or incorrect Danish VAT registration numbers can slow down or block the release of goods at the border.
• Disruption of business relationships – Danish customers and logistics partners increasingly expect foreign suppliers to be fully compliant and may suspend cooperation if tax issues arise.
• Increased audit risk – companies identified as non-compliant are more likely to be selected for detailed VAT audits in the future.

These issues can lead to lost sales, higher administrative costs and long-term damage to the company’s reputation on the Danish market.

Risk of criminal proceedings in severe cases

In cases where the Danish Tax Agency considers that VAT has been deliberately evaded or that false information has been provided, the matter may be referred for criminal investigation. This can result in:

• Substantial fines for the company
• Personal liability for directors or responsible managers in extreme cases
• Public registration of the case, which can seriously affect the company’s image

While not every breach leads to criminal proceedings, the risk increases significantly if a company ignores clear obligations, such as the requirement to appoint a VAT representative, over a longer period.

Why appointing a VAT representative reduces risk

A Danish VAT representative helps ensure that:

• The company is registered for VAT at the correct time and under the correct scheme
• VAT returns, EC Sales Lists and other reports are filed on time and in the correct format
• Communication with the Danish Tax Agency is handled professionally and in Danish when required
• Potential issues are identified early, before they lead to audits, penalties or retroactive assessments

By appointing a qualified VAT representative when required, foreign businesses significantly reduce the risk of unexpected tax liabilities, financial penalties and disruptions to their operations in Denmark.

Tax representation in e-commerce and distance sales to Danish customers

Online sellers and platforms targeting Danish customers must pay close attention to Danish VAT rules, especially after the introduction of the EU e-commerce VAT package and the One Stop Shop (OSS) and Import One Stop Shop (IOSS) systems. Tax representation plays a key role for non-EU businesses and, in some cases, can also be a practical solution for EU-established companies that want to minimise VAT risk when selling to Denmark.

Distance sales of goods to Danish consumers (B2C)

For cross-border B2C sales of goods within the EU, the local Danish distance sales threshold has been replaced by a single EU-wide threshold of EUR 10,000 net per calendar year (covering all cross-border B2C supplies of goods and certain services to consumers in all EU countries combined). Once this threshold is exceeded, VAT is due in the country of destination – in this case, Denmark – at the standard Danish VAT rate of 25%.

EU-based sellers have two main options:

• Register for the EU OSS scheme in their home Member State and declare Danish VAT there, or
• Register directly for VAT in Denmark and file Danish VAT returns locally.

Non-EU sellers that store goods in Denmark or otherwise create a Danish VAT obligation generally need a Danish VAT registration. In many cases they are also required to appoint a Danish VAT representative who will handle VAT compliance and communication with the Danish Tax Agency (Skattestyrelsen).

Online marketplaces and electronic interfaces

Online marketplaces and electronic interfaces that “facilitate” sales to Danish consumers may be treated as deemed suppliers for VAT purposes in specific scenarios, for example:

• Distance sales of imported goods in consignments with an intrinsic value not exceeding EUR 150, or
• Supplies of goods within the EU made by non-EU sellers to Danish consumers.

In these cases, the platform can become responsible for charging and reporting 25% Danish VAT, even if it does not own the goods. Non-EU platforms that are deemed suppliers and have Danish VAT obligations may be required to appoint a Danish VAT representative, unless they use the OSS/IOSS schemes correctly and fully comply with EU VAT rules.

Import of low-value goods and IOSS

For B2C sales of imported goods with a consignment value not exceeding EUR 150, the IOSS scheme allows sellers or platforms to charge Danish VAT at the point of sale and declare it via a single monthly IOSS return. This avoids Danish import VAT being collected from the customer by the carrier or customs.

Non-EU businesses that want to use IOSS generally must appoint an EU-established intermediary. Where the intermediary is established in Denmark or where the business also has Danish VAT obligations (for example due to stock in Denmark), a Danish tax representative can coordinate:

• IOSS registration and ongoing reporting
• Correct application of the 25% Danish VAT rate on eligible consignments
• Alignment of IOSS reporting with Danish customs and import procedures

When is a Danish tax representative needed in e-commerce?

A Danish VAT or tax representative is particularly relevant in e-commerce and distance sales when:

• A non-EU company holds stock in Denmark (for example in a Danish fulfilment centre or warehouse) and sells B2C to Danish customers
• A non-EU online store or marketplace is required to register for Danish VAT but has no establishment in the EU
• A non-EU platform is treated as a deemed supplier for sales to Danish consumers and must account for Danish VAT
• The business wants local support to manage Danish VAT obligations alongside OSS or IOSS registrations

In these situations, Danish law can require the appointment of a VAT representative who is jointly and severally liable for the VAT due. Even where representation is not strictly mandatory (for example for EU-established sellers using OSS), appointing a local specialist can significantly reduce the risk of errors in Danish VAT reporting.

How a Danish VAT representative supports e-commerce sellers

For companies engaged in distance sales and online trade with Danish consumers, a tax representative typically:

• Assesses whether sales fall under Danish VAT rules, OSS, or IOSS, and recommends the most efficient structure
• Handles Danish VAT registration and, where required, customs EORI registration
• Ensures correct application of the 25% Danish VAT rate and proper invoicing rules for B2C sales
• Prepares and submits Danish VAT returns and, where relevant, EC Sales Lists and Intrastat declarations
• Coordinates with logistics providers and customs agents on import VAT and customs clearance for goods shipped to Denmark
• Represents the company in correspondence and audits with the Danish Tax Agency related to e-commerce activities

With rapidly changing EU e-commerce VAT rules and strict Danish enforcement, having a knowledgeable Danish VAT representative helps online sellers and platforms maintain full compliance while focusing on growing their sales to Danish customers.

VAT representation for digital services and platforms (MOSS/OSS/IOSS)

Digital services and online platforms selling to Danish consumers are subject to Danish VAT rules, even if the supplier is established outside Denmark. To simplify cross-border VAT compliance in the EU, the EU has introduced special schemes: the One Stop Shop (OSS), the Import One Stop Shop (IOSS) and, historically, the Mini One Stop Shop (MOSS). Today, MOSS has been fully replaced by OSS, but many businesses still use the old term when referring to VAT on digital services.

For non-established businesses, tax representation in Denmark can be crucial to ensure correct registration, reporting and payment of VAT under these schemes and, where necessary, under a local Danish VAT number.

Digital services covered by OSS/IOSS in Denmark

OSS and IOSS apply mainly to B2C supplies. In Denmark, these schemes typically cover:

• Electronically supplied services (e.g. streaming, downloads, SaaS, cloud services, online gaming)
• Telecommunication and broadcasting services
• Online platforms and marketplaces facilitating B2C sales of goods and services
• Distance sales of goods to Danish consumers (within and from outside the EU, subject to specific conditions)

The standard Danish VAT rate is 25% and applies to most digital services and platform fees charged to Danish private customers.

OSS – One Stop Shop and Danish VAT

OSS allows EU-established suppliers and certain non-EU suppliers to declare VAT due in all EU Member States, including Denmark, via a single quarterly return submitted in one EU country of identification. Under OSS:

• B2C digital services supplied to Danish consumers are reported with Danish VAT at 25%
• Distance sales of goods to Danish consumers from other EU countries are also reported under OSS once the EU-wide threshold is exceeded
• The general EU-wide threshold for cross-border B2C sales of services and goods is EUR 10,000 (excluding VAT) per calendar year. Above this threshold, VAT is due in the customer’s country, including Denmark

Businesses using OSS do not need a separate Danish VAT registration solely for these cross-border B2C supplies, provided they have no other taxable activities in Denmark (such as local warehousing or domestic B2B supplies).

IOSS – Import One Stop Shop for low-value goods

IOSS is designed for B2C distance sales of imported goods with an intrinsic value not exceeding EUR 150 per consignment. When selling to Danish consumers under IOSS:

• Danish VAT at 25% is charged at the point of sale
• Goods are imported into the EU free of VAT, as VAT has already been collected via IOSS
• Suppliers or electronic interfaces (platforms) file a monthly IOSS return and remit the VAT collected

Non-EU businesses using IOSS generally must appoint an EU-established intermediary, which in practice often acts similarly to a VAT representative. For sales to Denmark, this intermediary ensures that Danish VAT is correctly applied and reported.

Role of a Danish tax representative for digital services and platforms

Although OSS and IOSS simplify reporting, many foreign businesses still need local support in Denmark. A Danish tax representative can:

• Assess whether your digital services or platform activities fall under OSS, IOSS or require a local Danish VAT registration
• Handle Danish VAT registration if OSS/IOSS cannot be used or if you have other taxable activities in Denmark
• Ensure correct application of the 25% Danish VAT rate and any special rules for B2B vs B2C transactions
• Prepare and submit Danish VAT returns, EC Sales Lists (if applicable) and OSS/IOSS reports related to Danish supplies
• Communicate with the Danish Tax Agency (Skattestyrelsen) in case of queries, data checks or audits

For non-EU suppliers that must register directly for Danish VAT (for example, where OSS/IOSS is not available or not used), appointing a VAT representative in Denmark is often mandatory. The representative becomes jointly and severally liable for Danish VAT, which is why tax authorities require that the representative is established and reliable.

Platforms and deemed supplier rules in Denmark

EU rules treat certain electronic interfaces (such as marketplaces, app stores and booking platforms) as “deemed suppliers” for VAT purposes. In practice, this means that for some B2C transactions to Danish consumers:

• The platform is treated as if it buys and resells the service or goods
• The platform is responsible for charging and remitting Danish VAT at 25%
• The underlying supplier may be treated as making a B2B supply to the platform, often without Danish VAT

A Danish tax representative helps platforms correctly identify which transactions fall under the deemed supplier rules, how to structure invoices and how to allocate VAT obligations between the platform and the underlying suppliers.

When is VAT representation particularly useful for digital businesses?

VAT representation in Denmark is especially relevant for:

• Non-EU providers of streaming, SaaS or other digital services selling to Danish consumers
• Non-EU online platforms facilitating sales to Danish customers, including via IOSS
• EU businesses exceeding the EUR 10,000 threshold and unsure whether OSS fully covers their Danish obligations
• Businesses holding stock in Denmark or combining digital services with physical goods or local events

In these situations, a Danish VAT representative can design the optimal combination of OSS/IOSS and local Danish VAT registration, minimise compliance risks and ensure that your digital business remains fully compliant with current Danish VAT legislation.

Interaction between Danish VAT representation and customs/import procedures

Danish VAT representation is closely linked to customs and import procedures, especially for non-established businesses importing goods into Denmark. Proper coordination between VAT registration, customs clearance and reporting to the Danish Tax Agency (Skattestyrelsen) is essential to avoid delays at the border, incorrect VAT payments and later reassessments.

When goods are imported into Denmark from non-EU countries, import VAT is normally due at the time of customs clearance. For businesses registered for Danish VAT, this import VAT is usually accounted for via the VAT return (reverse charge mechanism), rather than paid in cash at the border, provided the importer’s Danish VAT number is correctly used in the customs declaration. A Danish VAT representative can help ensure that the customs broker, freight forwarder and the importer all use consistent data: the correct EORI number, VAT number, customs value, Incoterms and commodity codes.

For non-EU companies that are required to appoint a VAT representative in Denmark, the representative often acts as the main contact point in relation to both customs and VAT. While the customs broker typically submits the import declaration to the Danish Customs and Tax Administration, the VAT representative checks that the information reported to customs matches the figures later reported in the Danish VAT return. This includes the customs value in DKK, transport and insurance costs, customs duties, and any excise duties that affect the taxable base for import VAT.

In many supply chains, the VAT representative assists in determining who is the importer of record and how the transaction chain should be structured to minimise unnecessary cash-flow burdens. For example, if a non-EU supplier sells goods to Danish business customers on DDP terms, the foreign supplier may need Danish VAT registration and, in some cases, a VAT representative. The representative then helps align the customs import (where the foreign supplier is importer of record) with the domestic sale (where Danish VAT at 25% is charged to the customer) and ensures that import VAT is correctly deducted or reported.

For EU-established companies importing goods into Denmark, a VAT representative is usually not mandatory, but can still be appointed voluntarily to manage the interaction between customs and VAT. This is particularly useful for businesses with frequent imports, complex tariff classifications or multiple warehouses in Denmark. The representative can help implement procedures so that customs declarations, Intrastat reports and VAT returns are consistent, reducing the risk of audits and penalties.

E-commerce and distance sellers that import goods into Denmark for onward sale to Danish consumers also need to coordinate customs and VAT. Where goods are imported in bulk into Denmark and then distributed locally, the importer must ensure that import VAT is correctly declared and that subsequent domestic sales are reported with Danish VAT at 25%. A Danish VAT representative can help set up the correct flows, including the use of customs procedures such as customs warehousing or inward processing, and ensure that VAT is only accounted for when legally required.

In practice, cooperation between the VAT representative and the customs broker is crucial. The VAT representative does not replace the customs broker but complements their work by focusing on the VAT implications of customs decisions. This includes advising on the impact of customs valuation methods, transfer pricing adjustments, changes in tariff classification or origin rules on the Danish VAT position. When the Danish authorities carry out customs or VAT audits, the VAT representative can assist in explaining the company’s import flows, documentation and accounting records, helping to resolve discrepancies between customs data and VAT returns.

Overall, effective interaction between Danish VAT representation and customs/import procedures ensures that goods can be imported smoothly, VAT is correctly accounted for and recoverable where possible, and the business remains compliant with both customs and VAT regulations in Denmark.

How to choose a reliable VAT representative in Denmark (key criteria)

Choosing the right VAT representative in Denmark is crucial for staying compliant with Danish VAT law and avoiding unnecessary tax risks. A reliable representative will not only register your company for VAT and file returns on time, but also proactively monitor changes in Danish and EU regulations that affect your business model.

1. Proven expertise in Danish and EU VAT rules

Your VAT representative should have documented experience with Danish VAT legislation (momsloven) and EU VAT directives. Check whether they:

• regularly handle Danish VAT registrations for foreign companies (both EU and non-EU)
• understand sector-specific rules, for example for e‑commerce, digital services, logistics or manufacturing
• are familiar with schemes such as OSS, IOSS and import VAT procedures
• can explain in clear terms how the standard Danish VAT rate of 25% applies to your transactions

2. Registration and standing with the Danish Tax Agency (SKAT)

A trustworthy VAT representative must be properly established in Denmark and in good standing with the Danish Tax Agency (Skattestyrelsen/SKAT). When assessing a provider, verify that they:

• have a valid Danish CVR number and are registered for VAT themselves
• have no known history of serious tax disputes or sanctions with SKAT
• can act as your official contact point in all correspondence with Danish authorities

3. Experience with your type of business and transactions

VAT treatment in Denmark depends strongly on the nature of your supplies and the location of customers. Look for a representative who has handled:

• B2C distance sales to Danish consumers, including monitoring turnover thresholds and platform rules
• B2B supplies to Danish VAT-registered customers, including reverse charge situations
• import of goods into Denmark and the interaction between customs, import VAT and domestic VAT
• digital services, SaaS, apps and online platforms selling to Danish users

The more closely their existing client portfolio matches your business model, the lower the risk of misclassification of transactions or incorrect VAT reporting.

4. Scope of services and clear responsibilities

Before appointing a VAT representative, make sure you understand exactly which tasks are included. A comprehensive Danish VAT representation service typically covers:

• VAT registration with SKAT and obtaining a Danish VAT number
• ongoing preparation and filing of periodic VAT returns within the statutory deadlines
• Intrastat and EC Sales Lists (if applicable)
• monitoring of turnover thresholds and changes in VAT rules relevant to your activity
• handling queries from SKAT, audits and requests for additional documentation

Ask for a written description of responsibilities, including which data you must provide, in what format and by which dates, to allow timely and accurate filings.

5. Compliance processes and internal controls

A reliable VAT representative in Denmark should have robust internal procedures to minimise errors and late filings. When comparing providers, ask how they:

• validate your sales and purchase data before preparing VAT returns
• reconcile VAT returns with accounting records and bank statements
• track filing deadlines and payment dates to avoid penalties and interest
• store and protect your documentation in line with Danish record-keeping requirements

Structured processes and checklists are especially important if your company has a high volume of transactions or multiple sales channels.

6. Communication, language and response times

Efficient communication with your VAT representative is essential, particularly if you operate from outside Denmark. When choosing a partner, consider whether they:

• offer service in English (and, if needed, other languages used in your organisation)
• provide a dedicated contact person familiar with your account
• commit to clear response times for questions from your team
• are able to explain complex Danish VAT issues in a practical, business-oriented way

Fast and transparent communication significantly reduces the risk of misunderstandings and missed deadlines.

7. Digital tools and data security

Modern VAT compliance in Denmark relies heavily on digital reporting and secure data exchange. A strong VAT representative should:

• use professional accounting or VAT compliance software compatible with your systems
• offer secure channels for transferring invoices, sales reports and other sensitive data
• be able to work with data exports from your e‑commerce platforms, ERP or marketplace dashboards
• ensure compliance with data protection regulations when processing your information

8. Transparency of fees and contract terms

Cost is an important factor, but the cheapest option is not always the safest. When evaluating fee structures, pay attention to:

• whether prices are fixed (per month or per filing) or based on transaction volume
• which services are included in the standard fee and which are billed separately (for example audits, complex rulings or historical corrections)
• payment terms and any additional charges for urgent work or late data delivery
• minimum contract duration and notice period for termination

Clear and predictable pricing helps you plan your compliance budget and avoid unexpected costs.

9. Liability, guarantees and professional insurance

Under Danish rules, a VAT representative may share responsibility for correct VAT reporting and payment. To protect your business, check whether the provider:

• has professional indemnity insurance covering errors in tax compliance
• clearly defines in the contract how liability is allocated between your company and the representative
• has procedures for correcting past returns and communicating with SKAT if mistakes are discovered

A solid approach to risk management is a key indicator of a professional VAT representative.

10. References and reputation on the Danish market

Finally, ask for references from clients with a similar profile to yours. Indicators of a good reputation include:

• long-term relationships with foreign companies operating in Denmark
• positive testimonials or case studies related to Danish VAT representation
• cooperation with law firms, customs brokers or logistics providers in Denmark

Combining these criteria will help you choose a Danish VAT representative who not only meets formal requirements, but also supports your business growth on the Danish market in a safe and compliant way.

Costs and typical fee structures for VAT representation services in Denmark

Costs of Danish VAT representation depend mainly on the size of your business, the volume of transactions and whether you are established in the EU or outside the EU. Below we outline the most common fee models and what typically influences the final price, so you can better plan your tax compliance budget in Denmark.

Typical cost components of VAT representation in Denmark

When appointing a Danish VAT representative, you will usually encounter several types of fees rather than a single flat price. The most common cost elements are:

• Initial analysis and VAT registration – one‑off fee for assessing your activities in Denmark, determining VAT obligations, obtaining a Danish VAT number and, where required, registering for import, customs or special schemes. For a standard case, this is often priced as a fixed project fee.
• Ongoing VAT return preparation and filing – recurring fee (monthly, quarterly or half‑yearly, depending on your Danish filing frequency) for preparing and submitting VAT returns and EC Sales Lists, if applicable.
• Bookkeeping and transaction review – additional fee if the representative must process your sales and purchase data, reconcile accounts or correct errors in previous periods.
• Communication with the Danish Tax Agency (Skattestyrelsen) – fees for handling correspondence, clarifications, refund claims and day‑to‑day queries from the authorities.
• Support during VAT audits and inspections – usually billed on an hourly basis for preparing documentation, representing you during audits and negotiating with the tax authorities.
• Guarantees or security (mainly for non‑EU businesses) – in some cases, the representative may require a financial guarantee or deposit to cover potential VAT liabilities and penalties.

Common fee structures used by Danish VAT representatives

Danish tax representatives usually apply one or a combination of the following pricing models:

• Fixed setup fee – a one‑time charge for onboarding, VAT registration and initial analysis of your supply chains. This fee is often higher for non‑EU companies, businesses with complex flows of goods or multiple Danish warehouses.
• Monthly or quarterly retainer – a recurring fixed fee covering standard compliance: VAT return preparation, basic reporting and routine communication with the tax office. The amount typically depends on:
  • number of invoices per period
  • number of Danish VAT registrations (e.g. separate registrations for different activities)
  • frequency of filings (monthly, quarterly or semi‑annual)
• Transaction‑based pricing – an additional fee per invoice or per transaction line, used when transaction volumes are high or fluctuate strongly during the year (for example in e‑commerce).
• Hourly rates for advisory work – applied to non‑standard tasks such as tax planning, complex VAT rulings, restructuring supply chains, or handling audits and disputes. Hourly rates are usually higher for senior VAT specialists.
• Hybrid model – a combination of a base retainer (covering routine compliance) plus variable fees for extra services, high volumes or special projects.

Factors that influence the cost of VAT representation

The final price of VAT representation in Denmark is shaped by several practical aspects of your business:

• Place of establishment – non‑EU companies usually face higher fees because the representative assumes greater risk and may be jointly and severally liable for unpaid VAT. This often requires more intensive monitoring and sometimes a financial guarantee.
• Type of activity in Denmark – cross‑border e‑commerce, distance sales, consignment stock, call‑off stock, dropshipping or B2C digital services can generate more complex VAT obligations than simple B2B wholesale.
• Volume and complexity of transactions – the more invoices, currencies, returns, discounts and corrections, the more work is needed to ensure accurate VAT reporting.
• Number of countries involved – if your Danish transactions are closely linked with other EU markets, customs procedures or special schemes (such as OSS or IOSS), the representative may need to coordinate multiple jurisdictions.
• Quality of your internal records – well‑structured accounting data, clear VAT coding and timely document delivery reduce the time needed for processing and therefore the cost.
• Level of automation – integration between your ERP/e‑commerce platform and the representative’s systems can lower manual work and, in the long term, reduce fees.

Additional costs to consider

Beyond standard representation fees, you should also plan for possible extra expenses:

• Corrections of past periods – if previous VAT returns require amendments, the representative may charge a separate project fee, especially when several years must be reviewed.
• Voluntary disclosures – preparing voluntary corrections to the Danish Tax Agency to limit penalties and interest is usually billed as a separate advisory assignment.
• Customs and import handling – if your representative also manages import declarations, customs value adjustments or cooperation with freight forwarders, these services are often priced independently from VAT compliance.
• Translation and document legalization – in some cases, official translations, notarizations or apostilles may be required for corporate documents, which generates additional external costs.

How to optimise the cost of Danish VAT representation

To keep VAT representation costs under control while maintaining full compliance in Denmark, it is worth:

• clearly defining the scope of services (what is included in the fixed fee and what is billed separately)
• agreeing in advance on the expected volume of transactions and reporting frequency
• standardising the format in which you deliver data (for example, consistent exports from your accounting or e‑commerce system)
• using automation where possible, especially for recurring B2C sales
• regularly reviewing the cooperation to adjust the fee structure if your Danish operations grow or change

A transparent fee model and clear division of responsibilities with your Danish VAT representative help you avoid unexpected costs and ensure that your business remains fully compliant with Danish VAT rules.

Termination or change of VAT representative – procedure and implications

Ending cooperation with a Danish VAT representative or appointing a new one is not only a business decision, but also a formal tax event that must be properly notified to the Danish Tax Agency (Skattestyrelsen/SKAT). Incorrect or late handling of this process can lead to gaps in VAT compliance, penalties and delays in refunds.

When can you terminate a Danish VAT representative?

A VAT representation agreement can usually be terminated when:

• your company ceases taxable activities in Denmark and applies for VAT deregistration
• your business becomes established in Denmark (e.g. opens a fixed establishment) and no longer needs a representative
• you switch to another VAT representative in Denmark
• cooperation with the current representative is unsatisfactory (e.g. lack of communication, delays, errors in returns)
• your risk profile changes (e.g. lower turnover, change of business model, switch to OSS/IOSS for certain transactions)

Formal procedure for terminating a VAT representative

The exact steps depend on whether you are:

• fully withdrawing from Danish VAT registration, or
• remaining VAT registered but changing representative.

1. Termination in connection with VAT deregistration

If you stop all taxable activities in Denmark, you must:

1. File a final VAT return – including all outstanding sales, purchases, import VAT and corrections up to the last day of taxable activity. The standard Danish VAT rate is 25%, and all taxable transactions must be reported at this rate unless specifically exempt.
2. Settle all VAT liabilities – pay any outstanding VAT, interest and penalties before deregistration is completed.
3. Apply for VAT deregistration – your VAT representative usually submits the deregistration request electronically to SKAT, indicating the end date of activities.
4. Close open matters – respond to any pending queries from SKAT, complete VAT audits and provide additional documentation if requested.
5. Formally end the representation agreement – in line with the notice period and conditions in your contract (often 1–3 months’ notice).

VAT representation formally ends when SKAT confirms deregistration and the representative is removed from your VAT registration details.

2. Changing from one VAT representative to another

If you remain VAT registered in Denmark but wish to change representative, it is essential to avoid any “gap” in representation, especially for non-EU businesses that are required to have a representative.

The typical process is as follows:

1. Review your current contract – check notice periods, termination conditions, handover obligations and any exit fees.
2. Select and appoint a new representative – sign a new service agreement, define responsibilities (returns, Intrastat, customs, audits) and agree on communication procedures.
3. Notify SKAT of the change – your new representative usually submits an update of your VAT registration, indicating that they take over as VAT representative from a specific date.
4. Define a clear cut-off date – determine which VAT periods and transactions will be handled by the old representative and which by the new one (e.g. all transactions up to the end of a specific month handled by the old representative).
5. Organise transfer of documentation – ensure that accounting records, VAT calculations, correspondence with SKAT and login details for relevant portals are securely transferred or made accessible to the new representative.
6. Confirm closing balances – agree on the final VAT position (payable or refundable) at the handover date to avoid double reporting or omissions.

Responsibilities and liabilities during and after termination

Under Danish VAT rules, the taxable person (your company) remains ultimately responsible for correct VAT reporting and payment, even when using a VAT representative. However, the representative may have joint and several liability for Danish VAT in certain cases, particularly for non-EU businesses.

Key points to consider:

• The outgoing representative is generally responsible for periods for which they were formally appointed and for returns they prepared and filed.
• The incoming representative is responsible from the agreed start date and for the VAT periods they handle.
• SKAT can still contact the former representative regarding past periods, especially in the context of audits or corrections.
• Your company may need to sign powers of attorney or updated authorisations so that SKAT recognises the new representative as your contact point.

Implications of terminating a VAT representative without replacement

For non-EU companies that are required to have a VAT representative in Denmark, terminating the representative without appointing a new one can have serious consequences:

• SKAT may refuse to process VAT returns or refunds if no valid representative is registered.
• Failure to maintain required representation can lead to penalties, interest and potential assessments based on estimates.
• In extreme cases, SKAT may cancel your VAT registration or restrict your ability to trade in Denmark.

EU-established companies that are not legally required to appoint a representative can usually continue to be VAT registered without one, but must then handle all Danish VAT compliance directly and communicate with SKAT on their own.

Practical recommendations for a smooth transition

To minimise risk when terminating or changing a Danish VAT representative:

• plan the change around a natural reporting cut-off (end of month, quarter or year)
• avoid overlapping or “empty” periods where no one is clearly responsible for filings
• ensure that all deadlines for Danish VAT returns and payments are met during the transition
• keep written confirmation of termination and appointment dates, as well as SKAT’s acknowledgements
• verify that bank details used for VAT payments and refunds are correctly updated with SKAT

A well-managed termination or change of VAT representative helps maintain full Danish VAT compliance, protects your company from unnecessary penalties and ensures continuity in communication with the Danish Tax Agency.

Which companies in Denmark are required to have a VAT representative?

VAT formalities can be handled by EU companies on their own or with the support of fiscal VAT representation in Denmark. Companies that conduct taxable activities in Denmark are required to register as a VAT taxpayer and file and settle VAT returns in Denmark. For companies outside the European Union, appointing a tax representative located in Denmark is necessary to ensure that all administrative requirements are met.

To avoid tax-related problems, any company planning transactions in Denmark must carefully assess its compliance obligations and carry out the necessary registration. It is advisable to consult a tax expert to help understand the detailed regulations and avoid possible mistakes that could lead to sanctions.

Businesses based in the European Union, as well as Norway, Greenland, Iceland and the Faroe Islands, have the option of registering with the local VAT authorities themselves. While they are not required to engage a tax representative, companies outside these areas can opt to use a local representative to handle the time-consuming and complex VAT issues. For EU companies, the cost of such a service is usually lower, as they do not have to share responsibility.

For non-EU companies that must appoint a tax representative in Denmark, the responsibility for tax compliance is shared with the foreign company. To secure the representative's interests, the client may be required to provide a bank guarantee or deposit.