If you are self-employed and sell certain types of services, these services may be exempt from VAT. This means that you do not have to register for and pay VAT, but generally you need to pay payroll tax instead of VAT.

Register your business for VAT or payroll tax at www.indberet.virk.dk (in Danish)

 

A number of services are exempt from VAT as long as certain conditions are met. These conditions depend on the kind of service.

Hospital treatment and medical services, including chiropractic, physiotherapy, other actual healthcare and dental services are exempt from VAT.

In addition to hospital and medical treatment, treatments provided by alternative therapists and other healthcare professionals are also exempt from VAT as long as they meet certain conditions.

Conditions relevant to alternative therapists and other healthcare professionals

In order for a service to be exempt from VAT, you need to, as an alternative therapist or other healthcare professional, meet the below conditions:

  • You need to carry out your treatment with a view to cure illnesses or health issues, or you need to perform prophylactic treatment with a view to preventing illness or health issues.

  • You need certain and sufficient training in order to carry out the treatments.

If you provide healthcare treatment services exempt from VAT, you need to pay payroll tax.

School teaching and teaching on higher education programmes

School teaching and teaching on higher education programmes are exempt from VAT. This covers teaching in primary and lower secondary schools, in upper secondary schools, etc.

Professional training

Generally, professional training, including retraining and other training of an educational or vocational nature, is exempt from VAT. Such training is required to supplement or maintain the occupational skills of the participant.

Physical training such as gymnastics or yoga, is also considered professional training.

Qualifying professional training

Qualifying professional training is exempt from VAT.

By using the term qualifying training the Danish Tax Agency (Skattestyrelsen) means professional basic education and other qualifying education intended to qualify the student for a certain job after having obtained the exams.

Course activities

The Danish Tax Agency considers professional training that is not directly providing qualifications as course activities.

Generally, course activities are exempt from VAT if it is in fact professional training of individuals. On the contrary, course activities aimed at businesses and institutions and provided for a profit are always subject to VAT.

Generally, if you provide training exempt from VAT, you need to pay payroll tax.

Payment for literary or composer activities or other artistic activities is exempt from VAT.

This applies, for example, to:

  • payments for services performed by actors and musicians

  • payments for speaker activities

  • payments for certain journalistic activities

VAT exemption does not apply to:

  • sales of goods such as art objects etc.

  • events such as concerts where the artist charges an entrance fee

If you perform artistic activities, you do not need to pay payroll tax.

The sale of real property including buildings, plots, windmills, etc. is exempt from VAT.

However, this does not apply to the sale of recently constructed buildings and building plots.

Generally, renting out real property is also exempt from VAT. You may decide to register voluntarily and pay VAT on your rental property if it is rented out commercially for other than residential purposes.

If you sell or rent out real property without VAT, you are not required to pay payroll tax.

Passenger transport is exempt from VAT. For buses, the exemption only applies to regular service. Tourist bus services are, however, subject to VAT.

Generally, the VAT exemption for passenger transport comprises passenger transport using any means of transport.

If you provide passenger transport services that are exempt from VAT, you must pay payroll tax.

Please see our legal guide (in Danish) for further legal information.