Danish VAT for beginners: how VAT works in your business

When must you register for VAT?

You must register once your VAT-liable turnover exceeds DKK 50,000 within 12 months. You can register voluntarily before that — worthwhile if you have large start-up purchases you'd like the VAT back on.

Output VAT and input VAT

Output VAT is the 25% you add on top of your prices. Input VAT is the VAT you pay on business purchases — and that part you can deduct.

An example: you invoice DKK 10,000 + 2,500 VAT and buy supplies for DKK 4,000 + 1,000 VAT. You then owe 2,500 − 1,000 = DKK 1,500 to the Tax Agency. If you bought more VAT than you sold, you get money back.

What can you deduct VAT on?

The main rule: you can deduct VAT on purchases used in your VAT-liable business — goods, software, equipment, commercial rent and the like. There are important exceptions: no VAT deduction on buying and running white-plate cars, and only partial deduction on restaurant visits, for example.

Documentation is always required: no invoice or receipt showing VAT, no deduction.

VAT-exempt sectors

Some services are VAT-exempt — including healthcare, education and passenger transport. If you're exempt you don't charge VAT, but you can't deduct input VAT either, and you often pay payroll tax (lønsumsafgift) instead. Mixed businesses must split their VAT — get help with that one.

How to never do this math yourself

At Numina, VAT is calculated automatically as your receipts are booked — and your bookkeeper files with the Tax Agency before the deadline. The VAT treatment is set correctly on every single receipt, including the tricky ones.