How to calculate VAT

The VAT rate is 25% of the price of the goods or services you supply, including the costs (for example transport charges, postage or administrative fees) paid by the customer as part of the transaction (VAT base).

Example of calculating VAT

Items	Amount
Price of goods	DKK 80
Administrative fee	DKK 20
VAT base (invoice value)	DKK 100
VAT: 100 x 0.25	DKK 25
Total	DKK 125

You need to document all your sales, either by means of invoices or till receipts, and record your vouchers in your accounts in order for you to be able to calculate your output VAT when you need to file your VAT return.

All sales vouchers dated in the VAT settlement period must be included in the accounts.

VAT accounts

If you use a till, you need to print the daily takings (the Z receipt) every day. This receipt serves as documentation for your cash sales and it must be recorded according to date.

If you issue invoices, they need to be recorded according to invoice date.

Invoices

Invoices need to contain the following:

• invoice date
• sequential invoice number
• your VAT registration number (CVR no./SE no.)
• name and address of your business
• name and address of the buyer
• quantity and nature of the goods or services supplied
• delivery date if it differs from the invoice date
• price of the goods/services exclusive of VAT, possible discounts, bonuses or rebates, unless these are included in the unit price
• current VAT rate
• VAT amount

If you have sales that are subject to VAT and sales that are exempt from VAT in respect of the same customer, the invoice must clearly state for which amount VAT is calculated.

Till receipts

If you use a till, it must be auditable. This means that the till must be a double roll model as it needs to contain an audit roll in addition to the till receipt.

As a minimum, the till receipt must include the following:

• name or registration number (CVR/SE no.) of your business
• date of issue
• type of goods
• the specified VAT amount or information that the amount is inclusive of 25% VAT

It is important that you comply with these invoicing requirements as the buyer’s right to deduct VAT (deduction right) is conditional, among other things, on the vouchers complying with the rules.

There are special sales situations where you are also required to charge VAT. These include:

• If you receive prepayments, payments on account or a deposit.
• If you sell goods or services to your staff.
• If you receive settlement vouchers from a customer instead of you sending an invoice (especially for farmers).
• If you sell the business’s assets (for example computers, furniture, etc.) where you have deducted the input VAT.

Goods for private purposes

When you use goods or services from your business for private purposes, you need to calculate and pay VAT.

VAT deductions (click the link ‘Using goods and services for non-business purposes’) Second-hand goods

If you trade in second-hand goods, you can choose to apply the special VAT margin rules, meaning that you only need to calculate VAT on your profit.

Goods exempt from VAT

You do not need to calculate VAT on samples or advertisement articles etc., compensation deliveries or export sales.   

As of 1 January 2015, new VAT rules apply will if your business provides tele services, electronic services or radio and TV broadcast services.

VAT must be paid in the country where your customers reside or generally stay.

You need to be able to document where you customers stay, even if you believe all your customers to be Danish.

www.skat.dk/onestopmoms