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.

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.

The Core Principles of Danish Accounting

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

1. Full traceability

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

2. Digital compliance

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

3. Strict deadlines

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

4. Uniform standards

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

5. Low tolerance for inconsistencies

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

1. Bookkeeping Obligations in Denmark

All companies must maintain accurate bookkeeping throughout the year.

Table 1: Bookkeeping Requirements at a Glance

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

2. VAT (Moms) Rules in Denmark

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

VAT Registration

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

VAT Rates

• 25% standard rate

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

Table 2: VAT Reporting Frequencies

Late VAT reporting results in interest charges and administrative fees.

3. Corporate Tax and Financial Reporting

Corporate Tax

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

Annual Financial Statement

Companies must submit:

• Management statement

• Profit/loss account

• Balance sheet

• Notes

• Possible audit statement

• Consolidation documents (if required)

All filings are done digitally through the Danish Business Authority.

Table 3: Audit Requirements in Denmark

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

4. Payroll Accounting in Denmark (When Employing Staff)

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

Key processes include:

• Registering as an employer in Denmark

• Reporting salaries via eIncome

• Withholding employee tax

• Paying employer contributions (ATP, AM-bidrag)

• Calculating holiday pay under the Danish Holiday Act

• Reporting benefits, allowances and bonuses

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

5. Digital Platforms Required for Accounting

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

Essential systems:

• Virk.dk – company filings and VAT registration

• TastSelv Erhverv – VAT, tax and payroll reporting

• e-Boks – official digital mailbox

• MitID Erhverv – digital signature for tax and accounting tasks

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

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

6. Accounting for Foreign-Owned Companies

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

1. Proof of share capital

Banks or accountants must verify capital when forming an ApS.

2. Language

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

3. Banking documentation

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

4. Transfer pricing

Multinational companies must document intercompany transactions.

5. Cross-border tax management

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

7. Common Accounting Mistakes and How to Avoid Them

Foreign founders often face the same issues:

1. Late VAT registration

This leads to penalties and backdated VAT liabilities.

2. Incorrect payroll handling

Especially holiday pay, which follows unique Danish rules.

3. Using non-compliant foreign software

Local accounting tools simplify VAT and reporting.

4. Not updating beneficial ownership

Authorities require updates immediately after ownership changes.

5. Missing annual report deadlines

This may lead to compulsory dissolution of the company.

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

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.

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.

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