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VAT Representation in Denmark

VAT is a particular type of tax enforced in the European Union. EU regulations mandate that companies must have representation within the EU to manage VAT procedures with customs authorities.

When should a company register for VAT in Denmark?

As a result of the harmonization of VAT regulations across the European Union, the rules for VAT registration in Denmark closely resemble those in other member states. VAT registration in Denmark is necessary in the following circumstances:

Moreover, foreign companies engaged in Business-to-Consumer (B2C) transactions in Denmark must register for VAT if their intra-Community sales exceed the established threshold and they do not report VAT through the One-Stop Shop (OSS) system.

Foreign companies can register for VAT in Denmark by filling out the form found on the virk.dk website. Once the registration is successfully completed and the designated mailing address is provided, businesses will receive a DK number (Danish VAT number). A company that operates outside of Denmark but sells taxable goods or services in the country may need to register for VAT as a non-resident. This requirement aligns with the EU VAT directive, which stipulates that foreign companies must register for VAT under specific conditions to report taxable transactions and declare the VAT owed.

Companies that have not exceeded a revenue of 50,000 DKK in the last 12 months are not required to register for VAT in Denmark, but they may choose to do so.

If a company's revenue surpasses 50,000 DKK and it is not currently registered as a VAT taxpayer, it should register at the earliest opportunity. Furthermore, companies anticipating reaching this revenue threshold should register as VAT taxpayers at least 8 days before commencing their business activities.

Companies or individuals engaged in VAT-exempt activities according to Danish regulations are not obligated to register. These activities generally include:

Furthermore, certain small agricultural businesses may choose a simplified VAT scheme rather than standard VAT registration, which would make their tax obligations easier to manage.

It is important to mention that while these entities are not mandated to register for VAT, they may voluntarily decide to do so if it is advantageous for their business operations.

The necessity of having a VAT representative in Denmark is determined by the company's location.

In cases where a company needs to register for VAT in a different country because of its business activities, it may be necessary to appoint a local tax representative.

What does tax representation mean?

Tax representation is a service in which one company represents another that wants to import its products into the European Union. By utilizing a Danish tax representative, we can assist your company in establishing a competitive presence in the EU market.

Tax representation encompasses:

A company must designate a Danish tax representative if it operates outside the EU while selling goods or services in Denmark. This representative will manage issues related to Danish VAT and will share the responsibility for complying with Danish VAT obligations.

What services are included in tax representation?

The range of tax representation services includes:

Delegating VAT-related responsibilities to a tax representative in Denmark is a common practice, particularly for foreign companies that do not have a physical presence in the country or lack adequate understanding of local VAT regulations.

Assigning VAT obligations to a Danish tax representative is essential for safeguarding the company's operations, alleviating administrative burdens, and managing tax risk effectively in Denmark. The regulations concerning intra-Community and Danish VAT are intricate and often subject to change. Reporting requirements are ongoing and vary in their frequency. Non-compliance, delays, or mistakes in cash flow assessments can lead to substantial financial penalties.

Here are the VAT-related responsibilities commonly assigned to a tax representative:

Types of tax representation

There are two primary categories of tax representation:

General representation is a crucial solution for companies importing goods into Denmark, particularly when limited tax representation is not an option. This usually relates to transactions with other EU member states or the import of goods from outside the European Union. Danish tax authorities provide authorization under Article 23, which allows for the reverse charge of VAT on imports. This means that VAT does not need to be paid at the time of importation but can instead be reported in the VAT return. This authorization is granted exclusively to companies outside of Denmark that have designated a general tax representative.

Limited representation enables the importation of goods into the EU without the immediate payment of import VAT, providing significant support for cash flow. A fiscal representative with limited authorization acts exclusively on behalf of a non-resident company for the purpose of importing goods for later use. The authority of a limited tax representative is restricted to representing the non-resident company in importing goods without the upfront payment of VAT and in the subsequent distribution of those goods. Furthermore, limited tax representation is linked to a single license, which simplifies the process of adding new clients to the existing license.

Benefits of a tax representative in Denmark

A tax representative in Denmark not only helps with the registration of a foreign supplier but also significantly alleviates the challenges associated with VAT compliance during imports, thereby reducing administrative costs for the foreign supplier. The Danish tax representative serves as an authorized agent for the foreign supplier, ensuring that their rights and obligations are upheld. Furthermore, the representative takes on the responsibility for and partial settlement of VAT related to the sale of goods. Engaging the services of a VAT representative can result in lower costs and quicker delivery to customers in Europe, along with various other advantages.

The primary advantages of having a tax representative include:

By designating a tax representative in Denmark, even as a foreign company, you can take advantage of the reverse charge mechanism upon import. However, the foreign company retains responsibility for its tax obligations, although the tax representative can be held responsible for meeting these obligations on its behalf.

Companies based outside of Europe cannot register for VAT in Denmark independently. Instead, they are required to engage the services of a Danish VAT representative. This representative, usually a local entity, acts on behalf of the foreign company in interactions with local tax authorities. They are responsible for ensuring compliance with all VAT obligations, even if these were not previously understood. As a result, they may require a deposit (such as a bank guarantee) before allowing permission to represent the company.

In addition to fulfilling legal obligations, tax representation offers a simple and cost-effective alternative to setting up a physical presence through the establishment of a branch or subsidiary.

Tax representation in Denmark enables foreign companies to enter the Danish market without the expenses and complexities involved in establishing a business, such as forming a corporate structure and handling separate accounting processes.

A foreign company that designates a tax representative in Denmark will not be responsible for paying corporate income tax in the country.

The entire process is managed remotely from abroad by the tax representative, who takes care of all VAT-related tax obligations as mandated by the Danish tax authorities, including acquiring a VAT number, filing periodic VAT returns, and making VAT payments.

European companies are not obligated to appoint a Danish VAT representative. However, they can choose to designate an agent to manage tax formalities and communications with local tax authorities on their behalf. In these cases, a bank guarantee is not required. Nevertheless, the company is still fully responsible for fulfilling its VAT obligations.

General tax representative

A general tax representative is a Danish entity tasked with managing all VAT-related transactions for a foreign company operating in Denmark. This role is usually undertaken by customs agents, logistics companies, or accountants who provide logistical support while ensuring adherence to Danish VAT regulations.

The general tax representative is required to furnish a guarantee to the Danish tax authorities, usually equivalent to the VAT amount that the foreign company must pay for a particular quarter. However, the representative's liability goes beyond the value of the guarantee since the tax authorities can review VAT payments from the previous five years, which could result in liabilities up to five times the guarantee amount. As a result, general tax representatives frequently seek appropriate guarantees from their foreign clients to mitigate this risk.

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

Companies located in the EU, Norway, Greenland, the Faroe Islands, and Iceland can register directly with local VAT authorities and are not required to utilize a Danish tax representative. Conversely, companies from outside these regions may opt to appoint a local representative to manage the often intricate and time-consuming VAT responsibilities.

Businesses located outside the European Union must designate a tax representative in Denmark. Because the representative shares joint liability with the foreign company, the client may need to provide a bank guarantee or a security deposit for the representative.

It is essential for all companies operating in Denmark to evaluate their compliance requirements and, if needed, to register accordingly before conducting any taxable transactions.

All businesses involved in taxable transactions in Denmark must register as VAT payers, report their taxable transactions, and pay the VAT owed. Companies from the European Union can handle these responsibilities independently or enlist the services of a tax agent. In contrast, businesses based outside the European Union are required to utilize a tax representative to fulfill administrative obligations.

Legal basis for VAT representation in Denmark (Danish VAT Act and EU rules)

VAT representation in Denmark is based on both Danish national law and EU legislation. Understanding this framework is essential for foreign companies that need to register for Danish VAT or appoint a tax representative.

Danish VAT Act – national legal framework

The core legal basis for VAT in Denmark is the Danish VAT Act (Momsloven). It regulates who must register for VAT, when a tax representative is required, and what responsibilities apply to both the foreign company and its representative.

Key elements of the Danish VAT Act relevant to VAT representation include:

The standard VAT rate in Denmark is 25% and applies to most goods and services. There are no reduced VAT rates, but some supplies are exempt from VAT, such as most healthcare, education, certain financial services and rental of residential property. The VAT representative must ensure that the correct VAT treatment is applied under the Danish VAT Act.

EU VAT rules and their impact on Denmark

As an EU Member State, Denmark applies EU VAT legislation, primarily based on the EU VAT Directive (Council Directive 2006/112/EC). This Directive sets out common rules for:

Denmark implements these rules in the Danish VAT Act. For EU‑established companies, the EU framework limits when Denmark can require a VAT representative. In most cases, EU businesses can register directly for Danish VAT without appointing a representative, because mutual assistance and information exchange between EU tax authorities reduce the need for local guarantees.

VAT representation for non‑EU companies

The legal basis for requiring VAT representation is particularly important for companies established outside the EU. Under the Danish VAT Act, Denmark may require non‑EU businesses to appoint a VAT representative when they are obliged to register for VAT in Denmark, for example when:

Denmark can waive the requirement for a VAT representative if there is a mutual assistance agreement or similar cooperation framework between Denmark (or the EU) and the non‑EU country in question. In practice, this means that some non‑EU companies may register directly, while others must appoint a Danish‑based VAT representative who is jointly liable for VAT debts.

Joint and several liability of the VAT representative

One of the most important legal aspects of VAT representation in Denmark is the concept of joint and several liability. Under the Danish VAT Act, the VAT representative can be held liable together with the foreign company for:

This liability means that the Danish Tax Agency can claim outstanding amounts directly from the VAT representative. As a result, Danish VAT representatives typically require detailed documentation, robust internal controls and, in some cases, financial guarantees from the foreign company before accepting the mandate.

Interaction with EU special schemes (OSS and IOSS)

EU rules also provide special VAT schemes that can reduce the need for local VAT registration and representation in Denmark for certain types of cross‑border B2C sales:

However, when the conditions for these schemes are not met, or when a business holds stock in Denmark or performs local supplies, Danish VAT registration – and for some non‑EU companies, appointment of a VAT representative – remains legally required.

Administrative rules and guidance from the Danish Tax Agency

In addition to the Danish VAT Act and EU legislation, the Danish Tax Agency issues binding regulations and practical guidelines. These clarify:

VAT representatives are expected to follow these administrative rules closely and to maintain up‑to‑date knowledge of any changes in Danish or EU VAT law that may affect their clients.

In summary, the legal basis for VAT representation in Denmark is a combination of the Danish VAT Act, EU VAT rules and administrative practice. Together, they determine when a foreign company must appoint a Danish VAT representative, what obligations and liabilities arise, and how VAT must be reported and paid in Denmark.

VAT registration process in Denmark step by step

Registering for VAT in Denmark is a formal process carried out with the Danish Tax Agency (Skattestyrelsen / SKAT). Below is a practical, step‑by‑step overview of how VAT registration typically looks for foreign companies, including those that appoint a Danish VAT representative.

1. Determine whether you are required to register for VAT

Before starting the procedure, you must confirm that your activities in Denmark trigger a VAT registration obligation. In general, a foreign company must register for VAT in Denmark if it:

There is no general turnover threshold for foreign companies making taxable supplies in Denmark: in most cases, registration is required from the first taxable transaction. For distance sales of goods to Danish consumers via EU rules, specific thresholds and OSS schemes may apply, but local Danish registration is still often necessary when goods are stored in Denmark.

2. Decide on direct registration or VAT representation

Next, you must decide whether you will register directly or via a Danish VAT representative. In many cases, EU businesses can register without a representative, while non‑EU companies are more frequently required to appoint one based in Denmark. A VAT representative will handle communication with SKAT, prepare VAT returns and ensure compliance with Danish VAT rules.

At this stage you should also decide:

3. Collect the necessary documentation

To register for VAT, you (or your tax representative) must prepare a set of corporate and identification documents. Typically, SKAT will require:

All documents must be consistent and, if requested, translated into English or Danish. In some cases, SKAT may ask for additional documentation to verify the business substance and the nature of transactions.

4. Submit the VAT registration application to SKAT

VAT registration is carried out electronically via the Danish business registration system (Virk) or through direct communication with SKAT. Foreign companies usually submit the application through their VAT representative or local advisor.

In the application, you must provide at least:

It is important that the start date and description of activities are realistic. Incorrect information may lead to additional questions from SKAT or delays in issuing the VAT number.

5. Await approval and issuance of the Danish VAT number

Once the application is submitted, SKAT reviews the information and may request clarifications or additional documents. Processing times vary, but in straightforward cases approval is often granted within a few weeks.

After approval, your company is assigned a Danish CVR number (business registration number) and a VAT registration under this number. From this moment, you are obliged to:

6. Set up digital access and reporting routines

Denmark relies heavily on digital communication with businesses. After registration, you or your VAT representative must ensure:

VAT returns in Denmark are usually filed quarterly for small and medium‑sized businesses, and monthly for larger turnovers. SKAT assigns the reporting frequency based on expected turnover and risk profile. Deadlines are typically within one month and ten days after the end of the reporting period, but the exact due dates are specified in SKAT’s registration decision and in the online portal.

7. Start issuing compliant Danish VAT invoices

From the effective date of registration, all taxable supplies in Denmark must be documented with invoices that comply with Danish VAT law. Each invoice should include at least:

For intra‑Community supplies, exports or other zero‑rated transactions, specific wording and evidence are required to justify the 0% rate. Your VAT representative can help you implement correct invoicing practices from the start.

8. Comply with ongoing VAT obligations

After registration, you must fulfil all ongoing VAT obligations in Denmark, including:

Failure to submit returns or pay VAT on time may result in interest, surcharges and, in serious cases, deregistration or legal action. A Danish VAT representative can monitor deadlines, prepare returns and reduce the risk of non‑compliance.

9. Update registration details when your situation changes

If your business situation in Denmark changes, you must inform SKAT and, where applicable, update your VAT registration. This includes:

When you stop making taxable supplies in Denmark, you must apply for deregistration. SKAT will close your VAT number after final returns and any outstanding VAT have been settled.

A well‑managed VAT registration process in Denmark reduces the risk of delays, penalties and disputes with the tax authorities. Working with an experienced Danish VAT representative ensures that each step – from initial assessment to ongoing compliance – is handled correctly and in line with current Danish VAT regulations.

Documentation and information required by a Danish tax representative

A Danish VAT representative must collect and maintain a clear set of documents and information about the foreign company in order to register it for VAT in Denmark and to comply with ongoing obligations towards the Danish Tax Agency (Skattestyrelsen). Below is an overview of the key elements that are typically required.

Basic company identification

Before applying for Danish VAT registration, the tax representative will usually request:

Corporate and identification documents

To verify the existence and structure of the foreign company, the Danish VAT representative will normally require:

These documents often need to be recent (for example, issued within the last 3–6 months) and, in some cases, translated into English or Danish. For non‑EU companies, notarisation or apostille may be required depending on the country of origin and the specific practice of the Danish authorities.

Information about activities in Denmark

The VAT representative must understand the nature and scope of the company’s activities in Denmark to determine the correct VAT treatment and registration type. Typical information includes:

This information is crucial for determining whether the standard Danish VAT rate of 25% applies, whether any exemptions or reverse charge mechanisms are relevant, and whether the company has fixed establishments in other countries that affect the place of supply rules.

Contracts and commercial documentation

To support the VAT position and registration application, the tax representative may request copies of key commercial documents, such as:

These documents help to determine who is the supplier for VAT purposes, where the supply takes place, and who is responsible for import VAT, customs duties and local VAT reporting.

Accounting, invoicing and banking information

For ongoing VAT compliance, the Danish tax representative will need access to reliable accounting data and invoicing information. Typically, this includes:

The representative uses this information to prepare accurate VAT returns, EC Sales Lists (if applicable) and Intrastat declarations, and to ensure that invoices meet Danish VAT invoicing requirements, including correct VAT rates, VAT numbers and mandatory invoice content.

Import, export and customs documentation

Where the foreign company imports or exports goods to or from Denmark, the VAT representative will usually require:

These documents are essential for correctly reporting import VAT, applying zero‑rated exports, and documenting intra‑EU movements of goods in line with Danish and EU VAT rules.

Data needed for VAT returns and other filings

For each reporting period, the Danish VAT representative will request structured data to prepare and submit VAT returns and related reports. This typically includes:

The representative must also keep track of Danish VAT reporting deadlines, which vary depending on the company’s turnover and assigned reporting frequency (monthly, quarterly or half‑yearly), and ensure that all necessary information is provided in time to avoid penalties and interest.

Compliance, KYC and AML information

As a regulated service provider, a Danish VAT representative is subject to know‑your‑customer (KYC) and anti‑money laundering (AML) obligations. Therefore, the representative may additionally request:

This information helps the representative assess the risk profile of the client and comply with Danish and EU AML regulations.

Ongoing updates and communication

The documentation and information required by a Danish VAT representative are not static. The foreign company must inform the representative about any significant changes, such as:

Timely updates allow the VAT representative to adjust the VAT treatment, update registrations with Skattestyrelsen and ensure that the company remains fully compliant with Danish VAT law.

Obligations and liabilities of a VAT representative towards the Danish Tax Agency (SKAT)

A VAT representative in Denmark acts as the official point of contact between a foreign company and the Danish Tax Agency (Skattestyrelsen, often still referred to as SKAT). This role involves both practical compliance tasks and significant legal responsibility. Understanding these obligations and liabilities is crucial for both the foreign business and the appointed representative.

Core obligations towards the Danish Tax Agency

The VAT representative is responsible for ensuring that the foreign company complies with Danish VAT rules. In practice, this includes in particular:

Record‑keeping and documentation duties

The VAT representative must ensure that the foreign business maintains proper accounting records that meet Danish requirements. This includes:

Deadlines and ongoing communication with SKAT

Depending on the company’s turnover in Denmark, VAT returns are usually filed monthly, quarterly or half‑yearly. The VAT representative must:

Joint and several liability for VAT

One of the most important aspects of Danish VAT representation is liability. In many cases, the VAT representative can be held jointly and severally liable with the foreign company for Danish VAT obligations. This may include:

Because of this potential liability, VAT representatives in Denmark typically implement strict internal control procedures and may require security deposits, bank guarantees or advance payments from the foreign company to cover potential VAT risks.

Responsibility for correct VAT treatment

The VAT representative is expected to ensure that the foreign company applies Danish VAT rules correctly. This includes:

If the Danish Tax Agency later determines that VAT has been incorrectly charged or not charged when it should have been, both the foreign company and the VAT representative may face additional VAT assessments and potential penalties.

Obligations in case of changes or deregistration

When the foreign company changes its activities or ceases taxable operations in Denmark, the VAT representative must:

Compliance, audits and cooperation with authorities

The Danish Tax Agency actively monitors VAT compliance and may initiate audits or desk reviews. The VAT representative is obliged to:

Professional standards and duty of care

Although not all VAT representatives are legally required to hold a specific license, they are expected to act with a high level of professional care. This means:

For foreign businesses, appointing a VAT representative in Denmark therefore goes beyond a formal requirement. It involves entrusting a local expert with day‑to‑day communication with SKAT, ongoing VAT compliance and sharing responsibility for correct and timely settlement of Danish VAT.

Differences between VAT representation for EU and non‑EU companies

VAT representation in Denmark works differently for EU and non‑EU companies, even though both groups are subject to the same Danish VAT rate of 25% and the same Danish VAT Act. The key differences concern the obligation to appoint a tax representative, the level of liability, and some practical aspects of cooperation with the Danish Tax Agency (Skattestyrelsen).

Obligation to appoint a VAT representative

Companies established in another EU Member State generally do not have a legal obligation to appoint a VAT representative in Denmark. They can register directly for Danish VAT, file VAT returns and communicate with the tax authorities on their own, provided they meet the standard registration criteria (for example, distance sales to Danish consumers above the relevant EU thresholds or local supplies in Denmark).

Non‑EU companies may be required to appoint a VAT representative in Denmark in order to obtain a Danish VAT number. The obligation usually applies when a non‑EU business:

In practice, the Danish Tax Agency often expects a non‑EU company to have a local representative who is responsible for VAT compliance and communication with the authorities.

Liability and risk allocation

For EU companies, a Danish VAT representative is typically an optional service provider. The representative assists with registration, VAT returns and communication with Skattestyrelsen, but does not usually assume joint and several liability for the client’s VAT debts, unless this is explicitly agreed in the contract.

For non‑EU companies, the representative may be held jointly and severally liable for Danish VAT, interest and penalties related to the activities covered by the representation. Because of this higher risk, Danish VAT representatives usually apply stricter onboarding procedures for non‑EU clients, including:

Registration process and documentation

The basic VAT registration process is similar for EU and non‑EU companies: the business must provide identification data, a description of activities in Denmark, expected turnover and information on supply chains. However, non‑EU companies are often asked for additional documents, such as:

For EU companies, the process is usually faster and more straightforward, especially when they already have an EU VAT number and operate within the OSS or IOSS schemes.

Communication with the Danish Tax Agency

EU companies can communicate directly with Skattestyrelsen in Danish or English via the official online systems. They may still choose a representative to handle digital reporting, but it is not mandatory.

Non‑EU companies that are required to appoint a VAT representative usually conduct all communication with the Danish Tax Agency through that representative. The representative receives official letters, requests for information and audit notifications, and is responsible for responding within the statutory deadlines.

VAT refunds and input tax deduction

Both EU and non‑EU companies registered for VAT in Denmark have the right to deduct Danish input VAT related to taxable activities, provided they meet the general conditions and keep proper documentation.

However, when a foreign company is not registered for Danish VAT and only wants to recover Danish VAT on local purchases (for example, hotel costs, conference fees, local services), the procedure differs:

Compliance burden and monitoring

For EU companies, using a Danish VAT representative is mainly a way to simplify compliance, reduce language barriers and minimise the risk of errors. The compliance burden is largely contractual and depends on the scope of services agreed with the representative.

For non‑EU companies, the representative often plays a more intensive role in monitoring transactions, checking invoices, controlling VAT rates and ensuring that all reporting obligations are met on time. This is a direct consequence of the higher liability and the fact that the company has no establishment in the EU.

Cost differences

Because of the higher risk and broader responsibilities, VAT representation for non‑EU companies is usually more expensive than for EU businesses. Fee structures may include:

For EU companies, fees are typically lower and more closely aligned with standard accounting or VAT compliance services, as the representative usually does not bear joint and several liability.

In summary, EU companies can generally choose VAT representation in Denmark as a convenience, while for many non‑EU businesses it is a legal requirement and a key condition for obtaining and maintaining a Danish VAT registration. Understanding these differences helps foreign companies plan their market entry strategy, estimate compliance costs and select the right level of support in Denmark.

Costs and typical fee structures for VAT representation services in Denmark

Costs of VAT representation in Denmark depend mainly on the complexity of your activities, the volume of transactions and whether your company is established in the EU or outside the EU. Below you will find the most common fee models and cost elements you can expect when working with a Danish VAT representative.

One‑off fees

Most Danish tax representatives charge a one‑off onboarding fee for setting up the cooperation. This usually covers the VAT registration process with the Danish Tax Agency (Skattestyrelsen), initial risk assessment and collecting the required documentation.

For a standard VAT registration without customs procedures, this initial fee is often in the range of EUR 400–1,000, depending on the complexity of the structure, number of business activities and whether the company is from the EU or a third country. If the representative also assists with EORI registration or customs authorisations, an additional fee may apply.

Recurring monthly or quarterly fees

The core cost of VAT representation is the ongoing fee for preparing and submitting Danish VAT returns and communicating with the tax authorities. In Denmark, most foreign companies file VAT returns quarterly, unless their turnover in Denmark exceeds certain thresholds and they are moved to monthly reporting.

Typical fee structures include:

For companies with higher Danish turnover or frequent intra‑Community supplies and acquisitions, the monthly or quarterly fee will usually be higher due to the increased workload and risk.

Additional services and hourly rates

Beyond standard VAT returns, a Danish VAT representative may provide extra services such as:

These services are usually billed on an hourly basis. Hourly rates for experienced VAT specialists in Denmark often fall in the range of EUR 120–250, depending on the level of seniority and the complexity of the matter.

Security deposits and guarantees for non‑EU companies

For companies established outside the EU, Danish law allows the tax authorities to require that the VAT representative provides a financial guarantee, for example in the form of a bank guarantee or deposit. In practice, many representatives pass this requirement on to the client.

The amount of the guarantee is typically linked to the expected VAT liability in Denmark and may correspond to several months of average VAT payments. This is not a fee in the strict sense, but it is an important cost and liquidity factor to consider when entering the Danish market.

Minimum fees and bundled packages

Some VAT representatives in Denmark apply minimum annual fees, especially when they take on the role of joint and several liability for the client’s VAT obligations. Even if your transaction volume is low, you may be charged a minimum yearly amount to cover the representative’s risk and administrative work.

It is also common to offer bundled packages that include VAT registration, ongoing VAT returns, basic email support and standard reporting to Skattestyrelsen for a fixed annual price. Such packages can be cost‑effective for companies with predictable and relatively simple operations.

Factors influencing the total cost

When estimating the total cost of VAT representation in Denmark, consider:

How to compare fee offers

When comparing Danish VAT representatives, it is important to look not only at the headline price but at what is included in the fee. Check whether the offer covers:

A transparent fee structure and clear definition of included services help avoid unexpected costs and ensure that your VAT obligations in Denmark are handled correctly and efficiently.

Risks of not appointing a tax representative when required

Failing to appoint a VAT representative in Denmark when it is legally required can expose a foreign company to significant tax, financial and operational risks. Danish rules are strictly enforced by the Danish Tax Agency (Skattestyrelsen), and non‑compliance is monitored through VAT returns, cross‑border data exchange and customs controls.

Tax and financial consequences

If a company required to have a Danish VAT representative operates without one, the authorities may treat all supplies in Denmark as non‑compliant from the first day the obligation arose. This can lead to:

In serious or repeated cases, the tax authorities may estimate the VAT liability based on available data (for example, customs declarations or EU cross‑border reporting), which often results in higher assessed amounts than if the company had reported correctly from the start.

Joint and several liability and enforcement

Where a VAT representative is required but not appointed, the foreign company remains fully and solely liable for Danish VAT. The lack of a local representative makes it harder to communicate with the tax authorities and to respond quickly to queries or audits. This increases the risk that the Danish Tax Agency will:

For non‑EU companies, not having a required Danish VAT representative may also make it more difficult to defend the company’s position in case of disputes, because the authorities expect a local contact who understands Danish VAT practice and language.

Operational disruptions in trade and logistics

Operating in Denmark without a required VAT representative can directly affect day‑to‑day business. Typical issues include:

In extreme cases, the authorities may treat supplies as made by the customer under reverse charge or may requalify transactions, which complicates contracts and pricing and can damage commercial relationships.

Increased audit risk and reputational damage

Foreign companies without a required VAT representative are more likely to be selected for audit or control. During such checks, the Danish Tax Agency will review:

Repeated non‑compliance can lead to a reputation as a high‑risk taxpayer. This may influence how quickly the authorities process future VAT refunds and how strictly they interpret borderline cases. It can also affect relationships with Danish partners, banks and logistics providers, who increasingly perform their own compliance checks.

Loss of tax planning opportunities and support

A Danish VAT representative does more than fulfil a formal obligation. Without one, companies often miss opportunities to:

As a result, the total cost of VAT in Denmark can be higher than necessary, and the risk of historical corrections increases over time.

In summary, not appointing a VAT representative in Denmark when required can lead to back‑dated VAT assessments at 25%, interest, fines, blocked refunds, customs delays and a higher audit profile. Ensuring that the obligation is correctly assessed and, where applicable, appointing a qualified Danish VAT representative is therefore a key element of safe and predictable operations on the Danish market.

How to choose a VAT representative in Denmark – key criteria and due diligence

Choosing the right VAT representative in Denmark is a strategic decision that directly affects your tax risk, cash flow and relationship with the Danish Tax Agency (Skattestyrelsen). A good representative will not only handle formalities, but also help you navigate Danish VAT rules, avoid penalties and optimise your VAT position.

Key criteria when selecting a Danish VAT representative

When assessing potential VAT representatives in Denmark, pay attention to the following aspects:

1. Proven expertise in Danish and EU VAT
Your representative should demonstrate in‑depth knowledge of the Danish VAT Act (Momsloven) and EU VAT rules, including cross‑border supplies of goods and services, distance sales, call‑off stock, chain transactions and reverse charge mechanisms. Ask for examples of similar clients (industry, transaction types, turnover level) and how the firm has solved complex VAT issues in practice.

2. Experience with foreign (non‑resident) companies
Non‑resident businesses often face specific challenges: no permanent establishment in Denmark, import and customs procedures, local invoicing rules, and communication with Skattestyrelsen in Danish. Choose a representative who regularly works with foreign entities from both EU and non‑EU countries and understands typical structures such as Amazon/FBA sales, online platforms, construction and installation projects or cross‑border leasing.

3. Authorisation and representation before Skattestyrelsen
Your VAT representative should be formally authorised to act on your behalf before the Danish Tax Agency. Verify that they can:

Check whether the firm has clear internal procedures for handling tax audits, deadlines and appeals.

4. Understanding of your business model and sector
VAT treatment in Denmark can differ significantly between sectors such as e‑commerce, logistics, manufacturing, construction, digital services, financial services or events. A suitable representative should be able to quickly map your supply chains, identify place‑of‑supply rules, determine whether Danish 25% VAT applies, and assess whether exemptions or reverse charge mechanisms are relevant.

5. Capacity and responsiveness
Timely VAT compliance is crucial. Danish VAT returns are typically filed monthly, quarterly or half‑yearly depending on turnover, and late filing or payment may trigger interest and surcharges. Ensure that your representative has sufficient staff and clear response times for:

Ask who will be your day‑to‑day contact person and whether you will have access to senior VAT specialists when needed.

6. Digital tools and data security
Danish VAT compliance is largely digital. Your representative should use secure systems for:

Verify how they protect your data, where servers are located, and whether they comply with GDPR and relevant IT security standards.

7. Transparent fee structure
Costs for VAT representation in Denmark usually consist of a fixed fee for ongoing compliance and additional fees for advisory work or audits. Request a clear price list that distinguishes between:

Compare offers not only on price, but also on the scope of services, liability coverage and the level of support included.

8. Professional liability insurance and risk management
A VAT representative in Denmark should have adequate professional indemnity insurance. Ask for details of the insurance coverage and how the firm manages risk, internal quality control and review of VAT returns. Clarify to what extent the representative accepts responsibility for errors in filings and how potential claims would be handled.

9. Language skills and communication
For many foreign companies, communication in English is essential. Confirm that your contact persons can communicate fluently in English and, if needed, in other relevant languages. At the same time, the representative should be able to correspond with Skattestyrelsen in Danish and interpret official guidance and case law for you.

10. Local presence and network in Denmark
A representative with a physical presence in Denmark and experience with local banks, customs agents and logistics providers can often resolve practical issues faster. A strong local network is particularly valuable for businesses involved in imports, warehousing or construction projects that require coordination with Danish authorities and partners.

Due diligence before appointing a VAT representative

Before you sign an agreement, conduct structured due diligence to reduce legal and tax risks.

Check registration and background
Verify the company’s registration in Denmark, ownership structure and history. Ask for references from existing foreign clients with a similar profile. Review online information, professional memberships and any publications or seminars on Danish VAT the firm has delivered.

Review the service agreement carefully
The contract with your VAT representative should clearly define:

Ensure that the agreement specifies who is responsible for monitoring changes in Danish VAT legislation and informing you about their impact.

Assess internal procedures and compliance culture
Ask how the firm ensures the quality of VAT returns and advice. Key questions include:

A strong compliance culture reduces the risk of errors, penalties and disputes with Skattestyrelsen.

Test communication and reporting
Before appointing the representative, agree on communication channels and reporting formats. Clarify how often you will receive summaries of filed returns, VAT positions, payment deadlines and potential risks. A short trial period or pilot project (for example, support with VAT registration and the first return) can help you evaluate cooperation in practice.

Clarify exit and transition scenarios
Even if you plan long‑term cooperation, it is important to know how you can change or terminate your VAT representative in Denmark. Confirm that you will receive full access to your historical data, copies of filed returns and correspondence with Skattestyrelsen. A transparent exit process protects your continuity of compliance and simplifies the appointment of a new representative.

Careful selection and thorough due diligence will help you choose a VAT representative in Denmark who not only fulfils formal obligations, but also becomes a reliable partner in managing your Danish VAT compliance and minimising tax risk.

Termination or change of a VAT representative – procedure and implications

Changing or terminating a VAT representative in Denmark is possible, but it must be done in close coordination with the Danish Tax Agency (Skattestyrelsen, often still referred to as SKAT). Because the VAT representative is jointly and severally liable for Danish VAT, the authorities require clear documentation of when the representation starts and ends, and who is responsible for ongoing VAT obligations.

When can a VAT representative be changed or terminated?

A foreign company may decide to terminate or change its Danish VAT representative in several situations, for example:

In all cases, the foreign company remains responsible for ensuring that all VAT returns, listings and payments are correctly submitted up to the effective date of termination.

Procedure for terminating a VAT representative

The process usually includes the following steps:

  1. Review of the contract
    The agreement with the VAT representative should specify notice periods, termination conditions and handover rules. Notice periods are often 1–3 months, but may be longer for complex engagements.
  2. Notification to the representative
    Termination must be given in writing. The parties should agree on the last VAT period for which the current representative is responsible and how outstanding tasks (e.g. corrections, late invoices) will be handled.
  3. Notification to the Danish Tax Agency
    The change must be reported to the Danish Tax Agency via the relevant forms or online self‑service (TastSelv Erhverv). The authority must be informed of:
    • the date on which the representation ends
    • the details of the new VAT representative, if one is appointed
    • whether the company will continue activities in Denmark or apply for VAT deregistration
  4. Final VAT returns and reconciliations
    The outgoing representative usually prepares the last VAT return(s) for the periods for which they are responsible, reconciles Danish VAT accounts and ensures that:
    • all sales and purchase invoices have been reported
    • import VAT and customs data are correctly reflected
    • any corrections or additional assessments have been addressed
  5. Transfer of documentation
    The representative must hand over accounting records, VAT calculations, correspondence with the Danish Tax Agency and login information relevant to VAT compliance. Under Danish rules, accounting records must generally be kept for at least 5 years, so both the company and any new representative need access to complete historical data.

Appointing a new VAT representative

If the company continues taxable activities in Denmark and is still required to have a VAT representative (typically non‑EU businesses without a fixed establishment in Denmark), a new representative must be appointed without any gap in coverage. The new representative must:

The effective date of the new representation should be coordinated so that it directly follows the end date of the previous representative. This avoids periods in which the company is active in Denmark but has no authorised representative, which can lead to penalties or restrictions on its VAT registration.

Implications for VAT liability and compliance

Termination or change of a VAT representative does not erase past VAT liabilities. The outgoing representative may still be held jointly liable for VAT relating to periods during which they were appointed, even if errors are discovered later. For the foreign company this means:

If the Danish Tax Agency identifies under‑declared VAT for earlier periods, it can pursue both the foreign company and the former representative for payment, within the statutory limitation periods for VAT assessments.

Impact on VAT registration and deregistration

If the company is terminating the VAT representative because it is leaving the Danish market, it must apply for VAT deregistration. This involves:

The VAT registration remains valid until the Danish Tax Agency has processed the deregistration. Until then, the company (and its representative) must continue to meet all VAT obligations, even if no further sales are made.

Practical recommendations for a smooth transition

To minimise risk and ensure continuity of compliance when changing or terminating a VAT representative in Denmark, foreign companies should:

A carefully managed termination or change of VAT representative reduces the risk of disputes with the Danish Tax Agency, unexpected VAT assessments and conflicts with former service providers, while ensuring that the company’s Danish VAT registration remains fully compliant.

Interaction between VAT representation and Danish customs/import procedures

VAT representation in Denmark is closely linked to customs and import procedures. For many non‑resident businesses, the same Danish tax representative who handles VAT registration and reporting will also support customs clearance, import VAT, and Intrastat obligations. Understanding how these areas interact helps avoid delays at the border, unexpected VAT costs and penalties from the Danish Tax Agency (Skattestyrelsen) and the Danish Customs Agency (Toldstyrelsen).

Import VAT and customs clearance in Denmark

When goods are imported into Denmark from non‑EU countries, import VAT is generally due at the standard Danish VAT rate of 25% on the customs value of the goods, including customs duties, insurance and freight up to the first place of destination in Denmark. Depending on the type of goods, customs duties may also apply according to the EU Common Customs Tariff.

A foreign company that is the importer of record must usually have a Danish VAT number and, in many cases, a Danish EORI number. If the company is required to appoint a VAT representative, that representative often assists in:

Postponed accounting of import VAT (reverse charge)

Denmark allows import VAT to be accounted for via the VAT return instead of paying it at the time of customs clearance. This is often referred to as postponed accounting or reverse charge on import VAT. In practice, this means that import VAT is reported as both output VAT and input VAT in the same VAT return, resulting in a cash‑flow neutral effect for fully taxable businesses.

A VAT representative plays a key role in:

Who is the importer of record – and why it matters

The interaction between VAT representation and customs procedures depends heavily on who is designated as the importer of record in Denmark. This can be:

If the foreign supplier is the importer of record, it will typically need a Danish VAT registration and, for non‑EU businesses, often a Danish VAT representative. In this case, the VAT representative helps align Incoterms, contracts and customs documentation with the VAT treatment, ensuring that:

Customs representation vs. VAT representation

Customs representation and VAT representation are legally distinct, but in practice they often overlap. A customs broker or freight forwarder may act as direct or indirect customs representative when submitting import declarations, while a VAT representative focuses on VAT registration, returns and communication with the Danish Tax Agency.

For foreign companies, it is important that these two roles are coordinated. A Danish VAT representative will typically:

Intrastat and trade with other EU countries

In addition to customs declarations for trade with non‑EU countries, many Danish‑registered businesses must submit Intrastat reports for movements of goods within the EU once they exceed annual thresholds for arrivals or dispatches. These thresholds are set in Danish kroner and can change over time.

A VAT representative can assist by:

Import schemes for e‑commerce and low‑value consignments

For B2C e‑commerce, EU rules such as the Import One‑Stop Shop (IOSS) and the One‑Stop Shop (OSS) have a direct impact on how goods are imported into Denmark and how VAT is reported. Depending on the scheme used, import VAT may be collected at the point of sale or at customs.

A Danish VAT representative can help foreign online sellers to:

Risk management and audits

Discrepancies between customs data and VAT reporting are a common trigger for audits in Denmark. The Danish Tax Agency and the Danish Customs Agency exchange information and can cross‑check import values, tariff codes and VAT returns.

A proactive VAT representative helps reduce these risks by:

Practical cooperation between the foreign company, VAT representative and logistics partners

To ensure smooth customs clearance and correct VAT treatment in Denmark, clear communication between all parties is essential. In practice, this often means that the foreign company:

When this cooperation works well, VAT representation in Denmark not only ensures compliance but also optimises cash flow, reduces customs‑related delays and minimises the risk of penalties and interest on unpaid VAT or duties.

Digital reporting, e‑invoicing and VAT returns handled by a tax representative

In Denmark, VAT compliance is largely digital. Foreign businesses must submit VAT returns, SAF‑T style data and other reports electronically via the Danish Tax Agency’s systems. A Danish VAT representative can take over these obligations, ensuring that all digital reporting, e‑invoicing and VAT returns are submitted correctly and on time in accordance with Danish rules.

Digital VAT reporting in Denmark

All businesses registered for VAT in Denmark are required to file VAT returns electronically. The standard VAT rate is 25%, and returns must show Danish‑taxable supplies, acquisitions, imports and deductible input VAT in Danish kroner (DKK). A tax representative will typically:

For many foreign companies, the representative also aligns the Danish VAT reporting with the company’s internal ERP or accounting system, so that data can be exported in a format suitable for Danish digital requirements.

E‑invoicing and electronic record‑keeping

Denmark has mandatory electronic invoicing for supplies to public authorities, and strict rules for the content and storage of invoices. A VAT representative can help ensure that:

Where a foreign company uses e‑invoicing platforms or marketplace systems, the representative can review the setup to ensure that Danish VAT is calculated and displayed correctly, including the 25% standard rate and any exemptions that may apply.

VAT returns handled by a tax representative

Once a foreign company is registered for VAT in Denmark, it must submit VAT returns even in periods with no activity. The tax representative can manage the full cycle of VAT compliance, including:

If SKAT changes the reporting frequency or requests additional information, the representative acts as the main contact point, dealing with queries, audits and potential adjustments to previously filed returns.

Integration with other digital obligations

For many foreign businesses, Danish VAT obligations are linked to other digital processes, such as customs declarations, distance sales, platforms or warehousing in Denmark. A VAT representative can coordinate:

By centralising digital reporting, e‑invoicing and VAT returns with a Danish tax representative, foreign companies reduce the risk of errors, penalties and interest, and ensure that their Danish VAT compliance is fully aligned with current national and EU requirements.

Practical examples of when VAT representation is beneficial for foreign companies

VAT representation in Denmark is particularly useful for foreign companies that want to operate on the Danish market without establishing a local legal entity. Below are practical situations in which appointing a Danish VAT representative can significantly reduce risk, administrative burden and costs.

1. E‑commerce sales to Danish consumers (B2C)

Foreign online shops that sell goods to private customers in Denmark often need a Danish VAT number, especially when they store goods in Denmark or use a local fulfilment centre. Even if the company uses the EU One Stop Shop (OSS) scheme for cross‑border B2C sales, VAT registration in Denmark may still be required when:

In such cases, a VAT representative can handle Danish VAT registration, periodic VAT returns, Intrastat and EC Sales Lists (if applicable), and ensure that Danish invoicing and record‑keeping rules are followed. This helps avoid penalties for late or incorrect reporting and ensures correct application of the standard 25% Danish VAT rate.

2. Non‑EU companies selling goods with local stock in Denmark

Non‑EU businesses that hold stock in Denmark for local distribution are often required to appoint a Danish VAT representative. Typical examples include:

The VAT representative assists with:

This setup allows the foreign company to trade efficiently in Denmark without establishing a Danish subsidiary, while still complying with all VAT and reporting obligations.

3. Foreign companies importing goods into Denmark

Companies that import goods into Denmark and then sell them to Danish or EU customers often face complex interactions between customs and VAT rules. A VAT representative is particularly beneficial when:

The representative can coordinate with customs brokers, ensure that import VAT is correctly declared and recovered, and align customs documentation with VAT reporting. This reduces the risk of discrepancies between customs data and VAT returns, which can trigger audits or assessments from SKAT.

4. Foreign service providers with Danish VAT obligations

Some cross‑border services create a Danish VAT obligation even if the supplier has no permanent establishment in Denmark. Examples include:

In these cases, a VAT representative helps determine whether the place of supply is Denmark, whether the reverse charge mechanism applies, and when the foreign supplier must charge Danish VAT. The representative then manages registration, invoicing rules, VAT returns and any corrective filings.

5. Participation in Danish trade fairs and exhibitions

Foreign companies that regularly participate in trade fairs, exhibitions or pop‑up sales events in Denmark may be required to register for VAT if they make taxable supplies on Danish territory. A VAT representative can:

This is particularly relevant for non‑EU exhibitors who sell goods directly to visitors and need to charge Danish VAT at 25% on those sales.

6. Foreign businesses reclaiming Danish VAT

Foreign companies often incur Danish VAT on:

While EU businesses can usually reclaim Danish VAT via the electronic refund procedure in their home country, non‑EU businesses may need a Danish VAT representative to submit refund claims or to register for VAT if their activities go beyond passive cost incurrence. A representative helps collect the necessary documentation, verify deductibility rules and meet statutory deadlines for refund applications.

7. Market entry and testing the Danish market

Companies that want to test the Danish market before setting up a branch or subsidiary often prefer to operate through a foreign entity with Danish VAT registration only. A VAT representative is valuable when:

The representative handles all VAT and reporting obligations, allowing the company to focus on sales and market development. If the business grows, the representative can also support the transition to a Danish company or branch and the transfer of the VAT number if appropriate.

8. Complex supply chains involving Denmark

In international supply chains, Denmark is often used as a logistics hub for the Nordic region. VAT representation is particularly beneficial when:

A VAT representative helps map the supply chain, determine the correct place of supply, identify which party is responsible for Danish VAT and ensure that invoices and VAT returns reflect the actual flows of goods. This minimises the risk of double taxation or non‑taxation and reduces the likelihood of disputes with SKAT.

9. High‑risk sectors and increased audit focus

Certain industries, such as electronics, fuel, construction or scrap metal, are subject to increased VAT audit focus in many EU countries, including Denmark. Foreign companies operating in these sectors may benefit from a VAT representative who:

This is especially important for non‑EU companies, which may be required to appoint a VAT representative that is jointly and severally liable for Danish VAT. A professional representative will therefore pay close attention to compliance, reducing the risk of unexpected assessments, interest and penalties.

In all these scenarios, VAT representation in Denmark helps foreign companies comply with local regulations, avoid costly mistakes and maintain a smooth relationship with the Danish Tax Agency, while keeping their organisational structure as simple and flexible as possible.

Which companies are required to appoint a tax representative based in Denmark?

A foreign company engaging in transactions in Denmark that are subject to Danish VAT may need to designate a tax representative located in Denmark. This representative will handle the company’s VAT-related affairs on its behalf and interact with the Danish tax authorities. Their responsibilities will include:

It is mandatory for all companies outside the European Union that are involved in taxable transactions in Denmark to appoint a Danish VAT representative. This includes:

Not appointing a VAT representative in Denmark can lead to hefty penalties from the Danish tax authorities and may restrict companies from being able to claim VAT refunds.

Moreover, it is important to recognize that European partners (including suppliers, customers, trading platforms, etc.) frequently decline to work with companies outside of Europe that have not designated a VAT representative in Denmark, viewing it as too risky for their operations.

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