Denmark has introduced a new digital accounting requirement within the Danish Bookkeeping Act, which will be implemented gradually, with milestones set for 2024. 

Thus, on January 1, 2026, all VAT-registered entities with a net turnover exceeding DKK 300,000 (46.740€) for two consecutive years must comply with digital accounting requirements. This applies to companies established in Denmark as well as foreign entities that are only registered for VAT with relevant economic activity in the country.  

What does digital accounting entail? 

Companies must use digital accounting systems that meet a series of technical requirements to record, store, and manage accounting records electronically, leaving manual or paper-based methods.  

Systems must be able to handle electronic invoices in structured formats such as OIOUBL and Peppol BIS (including issuance and receipt). Taxpayers may maintain a digital archive in accordance with the regulations. 

What is required to comply with the regulations? 

Accounting systems must be capable of generating SAF-T (Standard Audit File for Tax) when required by the tax authority, audits, or tax inspections. However, there is no obligation to submit regularly these files to the administration. 

It should be noted that the regulations establish the possibility of imposing significant penalties for non-compliance with these digital requirements. This phenomenon may include fines of up to DKK 1.5 million (approximately €200,000) in cases of serious or repeated violations. These provisions are set out in the Danish Accounting Act, and their implementation will be supervised by the Danish Business Authority. This state body works closely with the Danish Tax Administration to verify compliance with digital requirements. 

Conclusions 

In summary, it should be noted that the obligated parties are entities registered for VAT purposes in Denmark with a specific turnover volume during two consecutive fiscal years. This regulation also covers foreign companies registered only for VAT purposes. This phenomenon implies: 

1. Digital accounting systems must be used, eliminating manual or paper records. 
2. System with the capacity to issue, receive, and archive electronic invoices in structured formats such as OIOUBL and Peppol BIS. 
3. System with the capacity to generate SAF-T (Standard Audit File for Tax) files when required by the tax authority. 

Denmark is the 15th best economy in Europe (World Bank, 2024), maintaining its status as a developed nation with highly qualified talent. Therefore, if your goal is to expand your multinational to this European country, contact our experts to learn firsthand about our financial services in Denmark. 

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations. 

Author:

Gisleno Castro

Account Manager – ES