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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.

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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