Take charge of your business VAT accounts
If your business is registered for VAT, you must keep accounts of the purchase and sale of goods and services. The accounts are used to show how much you need to report for each VAT period.
You must also keep accounts and file your VAT return even if you had no purchases or sales of goods or services during the period (zero declaration (nulindberetning)).
Here, you can read about the 5 most important things you need to know about VAT accounting.
When you need to file your VAT return, you must use the total amount for output VAT and the total amount for input VAT for the reporting period.
You find the VAT amounts you need to file in the your business accounts.
Remember that the accounts must be updated before you read the amounts for output and input VAT. You have to include all documents dated within the VAT reporting period. This applies even if the amount on the invoice hasn't been paid yet.
Are you trading with non-Danish countries?
If so, your VAT accounts also need an account for:
- VAT on non-Danish purchases of goods
- VAT on non-Danish purchases of services with reverse charge
- Purchases of goods in other EU countries (box A - goods)
- Purchases of services with reverse charge in other EU countries (VAT reporting box A - services)
- Sale of goods to other EU countries (VAT reporting 2 boxes B - goods)
- Sale of services with reverse charge in other EU countries (VAT reporting box B - services)
- Export to non-EU countries etc. (VAT reporting box C).
When you register your vouchers via accounting software, they are recorded automatically.
Make sure that you calculate output and input VAT for the period if the accounting software doesn't do this automatically. If it includes accounts receivable and payable, the VAT on your purchases and sales will be recorded automatically.
If you use accounting software approved by the Danish Business Authority (Erhvervsstyrelsen), you can choose to file your VAT return in TastSelv Erhverv directly from the accounting software.
Please note that it's still your responsibility to ensure that your VAT return is filed correctly and on time.
You can read more about how to file your VAT return via your accounting software at How to file your VAT return.
It is important that you record your expenses and income are recorded in the correct VAT periods.
As you need to calculate and report your VAT for each period (month, quarter, or half-year), you must include the VAT from all sales and purchase as well as expense receipts dated within the reporting period. This applies even if an invoice is not paid. The date of the invoice determines the relevant reporting period.
It doesn't matter when a sale or purchase is paid, except for prepayments without invoicing where the VAT obligation exceptionally arises at the time of payment. Otherwise, it is only the invoice date that determines in which VAT period you should record your output or input VAT.
What are the consequences if I record my VAT in the wrong period?
There can be several negative consequences of recording VAT in the wrong periods. For example, it can make your business accounts look incorrect and may result in your business being selected for an audit.
What should I do if I have recorded VAT in the wrong period?
If you discover that you have recorded VAT in the wrong period, you must correct the error in your VAT reporting. See how to correct VAT reporting.
All entries in the business accounts must be documented by means of vouchers. If a voucher doesn't meet the requirements, you may not be entitled to deduct the VAT on the voucher.
You can read more about what an invoice must include on Start up with tax for businesses - Get ready to do accounting or Start up with tax for companies - Get ready to do accounting Start up and tax for businesses - Get ready to do your bookkeeping (currently in Danish only) or Start up and tax for companies – Get ready to do your bookkeeping (currently in Danish only).
You have to keep all accounting records for 5 years - even if your business closes down. And you have to keep accounting records relating to acquisition and conversion of properties for 10 years.
Accounting records is anything in writing relating to the running of the business, including:
- Invoices
- Delivery notes
- Contracts
- Order forms
- Appointment books
- Annual accounts