The field of Danish accounting is integral for the functioning of any company in Denmark, one of the world’s most digitized and transparent countries. All accounting procedures are strictly regulated to ensure the utmost accuracy and transparency in financial reporting.
| Quick Facts | |
|---|---|
| Bookkeeping services |
Tracking financial transactions and providing complete and accurate records and accounts |
| Payroll | The administration of payroll and employment tax obligations provided by our accountant in Denmark |
| Invoicing | Request, track and manage invoices |
|
Cash management in Denmark |
Wire transfers, cash flow to equity, cash flow to the firm |
| Reporting | Handling the annual reporting obligations in Denmark |
| Financial analysis | Monthly, quarterly or annual reports, financial research and analysis |
| Forensic accounting |
Evaluate evidence and interpret the findings in the context of an investigation or in court |
| Tax compliance |
Assisting investors in Denmark with the payment of the applicable taxes |
| VAT compliance and reporting | VAT registration according to the applicable threshold, monthly, quarterly or biannual VAT submissions |
| Audit offered by our accountants in Denmark |
Financial, operational, compliance audits and other related services |
| Property financial matters | Real estate income reporting, real property tax compliance with the help of our accountant in Denmark, as applicable |
|
Statutory compliance in Denmark |
Assistance for compliance with the Danish GAAP or IAS/IFRS |
| Tax authority assistance | Representation and advice in dealing with matters involving the Danish Customs and Tax Administration |
| Support for voluntary dissolution | Upon request |
| Services for foreign companies offered by our accountant in Denmark | Complete accounting services in Denmark for foreign branches or subsidiaries |
| Consultancy services | Our accountants in Denmark offer consultancy services, including assistance with business plans for loan applications and specialized tax reviews. |
|
Services for small businesses |
– bookkeeping, – invoice payment, – VAT submissions, – monthly reporting, – creditor management solutions, – salary management, etc. |
|
Legal framework for accounting in Denmark |
The accounting and financial reporting rules outlined in EU Directives and Regulations. |
| Authorities responsible for financial reporting and auditing |
– Danish Business Authority, – Danish Financial Supervisory Authority |
| Corporate income tax |
22% |
| Withholding tax on dividends |
27%, increasing to 47% when it exceeds certain thresholds |
| VAT rates |
– 25% (standard), – 0% (for certain goods and services) |
| Automatic tax assessment |
Danish tax authorities will automatically generate a tax assessment for individuals based on the income they have reported. |
| Tax year for Danish companies |
From January 1st to December 31st, but it can be modified. |
| Joint taxation (YES/NO) | YES |
| Audit required (YES/NO) |
NO, only for larger companies |
| Audit exemptions |
– must not exceed a balance sheet total of DKK 4 million, – must not exceed an annual turnover of DKK 8 million, – must not exceed having 12 full-time employees. |
| Foreign tax credit (YES/NO) |
YES |
| Incentives for intellectual property |
Denmark offers incentives related to intellectual property rights used in research and development activities; Our team of lawyers in Denmark can provide guidance on how to leverage these incentives effectively. |
| Other accounting services assisted by our law firm in Denmark |
– monthly, quarterly, or annual reports; – budget management; – invoicing; – debt management, etc. |
What are the services offered by an accountant in Denmark?
Our team offers a wide range of services and we tailor our solutions based on the company profile, the number of employees, as well as the business goals for financial management. Some of the services offered by our accountants in Copenhagen include the following:
- Bookkeeping in Denmark: complete financial transaction records for companies, including the balance sheets, income statements, invoice filing, assets inventory, receivables, etc.;
- Payroll administration: an accountant in Denmark from our team specializes in this particular sector, dealing with all of the steps needed for paying the company’s workers;
- Tax and VAT reporting: preparing the annual tax and VAT returns, tax and VAT compliance and registrations as needed;
- Others: issuing monthly, quarterly or annual reports, budget management, invoicing, debt management and others.
What are the accounting services for small businesses in Denmark?
We offer solutions to companies of all sizes, however, at the same time, we know that professional tax and bookkeeping services can be very important when you are just setting up your business in Denmark.
Denmark is a very attractive country for start-ups and small businesses. A special type of visa is even dedicated to foreign, non-EU nationals who have the resources to incorporate an innovative business.
In a welcoming, albeit competitive climate, having professional accounting services in Denmark from the very beginning can be an important advantage for your business.
Small business and start-up owners can benefit from working with a team of accountants in Denmark. When accounting and bookkeeping is left within capable hands, such as those of our specialists, entrepreneurs can focus on growing their business and prioritizing what matters more for their specific business goals.
What are the Danish accounting principles?
Denmark is a member of the European Union and, as such, it is subject to the accounting and financial reporting rules outlined in the EU Directives and Regulations.
The two local authorities in charge of financial reporting and auditing are the Danish Business Authority and the Danish Financial Supervisory Authority.
Danish companies use the International Financial Reporting Standards (IFRS) as their accounting rules.
We remind company owners that the main taxes applicable to companies are the following:
- 22% corporate income tax;
- 27% withholding tax on dividends paid to a resident company, with a 5% reclaim percentage, reducing the effective rate to 22% (in some cases);
- 25% standard value-added tax rate and a 0% reduced VAT rate for certain services.
We also invite you to watch a short video about the main accounting requirements and the accounting services offered in Denmark:
When are the accounting filing due dates?
Companies prepare their financial statements each year. For many businesses, the financial year is the same as the calendar one, however, taxpayers may choose to use a different taxable period. The tax returns are filed according to the financial accounts, adjusted for tax and the tax returns are filed no later than 6 months after the end of the accounting year.
While companies can be subject to audit by the Danish tax authorities, only large companies or groups are required to submit annual audits.
What industries require accounting services in Denmark?
Accounting services in Denmark vary greatly according to the industry in which they operate. Accountants tailor their approach to fit the requirements of each industry in order to maximize efficiency and compliance. The most common include:
- IT and software firms (recurring billing, international customers, complicated VAT calculations)
- E-commerce firms (VAT for cross-border transactions, electronic payments, stock management)
- Building and property development firms (costing by project phase, phased invoicing, subcontractor payments)
- Accommodation and hospitality firms (cash flow management, staff payroll, seasonal workers)
- Freelancers and consultants (streamlined accounting and taxation).
What are the necessary components of an annual financial statement in Denmark?
All companies operating in Denmark should submit their annual financial statements based on the national accounting regulations. Different requirements apply based on the nature of the entity. Common elements of annual financial statements include:
- Statement of profit and loss;
- Statement of financial position (balance sheet);
- Accounting method explanation notes and key figures;
- Management discussion and analysis report (for medium and large enterprises).
When should I contact an accountant in Copenhagen for my company?
You can reach out to our team as soon as you have incorporated your company. Alternatively, you may need to change your accounting services provider or, if you company has previously had an internal accounting department, you may wish to switch to outsourcing these services. If you already work with our lawyers in Denmark, it will be convenient to also work with an accountant from our team.
Our experts offer tailored solutions, according to the size of your company as well as your short and long-term business goals. We offer both temporary accounting and auditing solutions, as well as long-term partnerships with companies across all industries.
Contact our accountants in Denmark for more information about the services we provide.