Accounting in Denmark is built on a combination of strict compliance, strong digital infrastructure and predictable legal standards. Whether a company is Danish-owned or foreign-owned, the accounting framework is the same: transparent, well-defined and designed for real-time control.

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This guide provides a deeper look into how accounting works in Denmark, including bookkeeping rules, reporting timelines, VAT requirements, audit thresholds and practical tables to help you understand your obligations quickly.

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The Core Principles of Danish Accounting

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Denmark’s accounting system is shaped by several foundational principles:

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1. Full traceability

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Every transaction must be documented, traceable and linked to a verifiable business purpose.

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2. Digital compliance

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Authorities expect digital records, digital submissions and digital communication through official platforms.

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3. Strict deadlines

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VAT, payroll and annual statements come with non-negotiable deadlines. Late submissions lead to automatic penalties.

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4. Uniform standards

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Danish GAAP (ÅRL) applies to most companies, though IFRS may be used by larger entities.

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5. Low tolerance for inconsistencies

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Authorities frequently cross-check VAT filings, payroll reports and bank data.

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1. Bookkeeping Obligations in Denmark

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All companies must maintain accurate bookkeeping throughout the year.

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Table 1: Bookkeeping Requirements at a Glance

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Bookkeeping must reflect transactions continuously — monthly or quarterly backlogs are discouraged.

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2. VAT (Moms) Rules in Denmark

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VAT is one of the most important areas of Danish accounting.

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VAT Registration

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Required once turnover exceeds 50,000 DKK per year. Many new companies register immediately to avoid delays.

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VAT Rates

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• 25% standard raten

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• Exemptions: healthcare, education, some finance, certain non-profit activitiesn

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Table 2: VAT Reporting Frequencies

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Late VAT reporting results in interest charges and administrative fees.

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3. Corporate Tax and Financial Reporting

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Corporate Tax

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Denmark uses a flat 22% corporate income tax. This applies to ApS, A/S, subsidiaries and foreign-owned Danish entities.

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Annual Financial Statement

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Companies must submit:

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• Management statementn

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• Profit/loss accountn

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• Balance sheetn

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• Notesn

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• Possible audit statementn

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• Consolidation documents (if required)n

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All filings are done digitally through the Danish Business Authority.

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Table 3: Audit Requirements in Denmark

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Foreign-owned companies often choose voluntary audits to strengthen credibility with banks and partners.

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4. Payroll Accounting in Denmark (When Employing Staff)

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Payroll is one of the most regulated aspects of accounting Denmark.

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Key processes include:

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• Registering as an employer in Denmarkn

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• Reporting salaries via eIncomen

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• Withholding employee taxn

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• Paying employer contributions (ATP, AM-bidrag)n

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• Calculating holiday pay under the Danish Holiday Actn

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• Reporting benefits, allowances and bonusesn

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Because payroll rules are strict and penalties are automated, most international companies outsource payroll.

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5. Digital Platforms Required for Accounting

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Denmark operates one of the world’s most digitalised business ecosystems.

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Essential systems:

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• Virk.dk – company filings and VAT registrationn

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• TastSelv Erhverv – VAT, tax and payroll reportingn

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• e-Boks – official digital mailboxn

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• MitID Erhverv – digital signature for tax and accounting tasksn

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• NemKonto – a required bank account for receiving payments from public authoritiesn

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Foreign founders usually work with Danish accountants to manage these systems.

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6. Accounting for Foreign-Owned Companies

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Foreign-owned companies in Denmark must follow the same accounting rules as local businesses, but with additional considerations:

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1. Proof of share capital

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Banks or accountants must verify capital when forming an ApS.

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2. Language

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Bookkeeping can be in English, but annual financial reports must be filed in Danish.

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3. Banking documentation

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Banks may request detailed financials from foreign owners due to EU AML regulations.

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4. Transfer pricing

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Multinational companies must document intercompany transactions.

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5. Cross-border tax management

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Coordination between Danish tax rules and the home country’s tax treaties is essential.

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7. Common Accounting Mistakes and How to Avoid Them

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Foreign founders often face the same issues:

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1. Late VAT registration

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This leads to penalties and backdated VAT liabilities.

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2. Incorrect payroll handling

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Especially holiday pay, which follows unique Danish rules.

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3. Using non-compliant foreign software

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Local accounting tools simplify VAT and reporting.

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4. Not updating beneficial ownership

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Authorities require updates immediately after ownership changes.

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5. Missing annual report deadlines

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This may lead to compulsory dissolution of the company.

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The safest solution is to use a Danish accountant familiar with both local and international requirements.

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Accounting in Denmark is highly structured, transparent and digital. Once you understand the system — VAT obligations, bookkeeping standards, audit thresholds and annual reporting — operating a company becomes efficient and predictable.

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For foreign-owned companies, the combination of strict documentation and digital infrastructure may feel demanding at first, but it ultimately ensures stability, trust and long-term compliance.

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With the right accountant and proper digital setup, Denmark offers one of the most reliable accounting frameworks in Europe.

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The post Accounting in Denmark: Practical Rules, Reporting Duties and Key Comparisons for Business Owners appeared first on EvolutionBoulders.

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