Selling services entitling the buyer to claim a tax deduction (businesses)

As a business, you need to be registered for VAT in Denmark in order for your customers to get a tax deduction for your work. Services carried out by businesses that are not registered for VAT are not tax-deductible.

VAT-registered businesses may carry out household services as well as home improvement services.

Non-Danish businesses carrying out household services and home improvement services in Denmark must be registered in the Register of Foreign Service Providers (RUT).

The RUT Register (www.amid.dk)

If the buyer is a cross-border worker, you have to meet other requirements as a supplier.

Businesses must always issue an invoice when they provide services that entitle the buyer to claim a deduction for home improvement services or household services. Invoices must meet the general requirements, and must include the business’s VAT registration number (CVR/SE no.).

In order to get a deduction, your customers will also need a labour cost specification. We recommend that labour costs are stated excluding VAT.

For services such as cleaning and window cleaning, all costs are considered labour costs if  materials costs make up less than 2%.

You only need to issue one invoice even if the costs are split between several people in a household and they each get a deduction for different parts of the costs.

Read about VAT

Customers must be able to document electronic payment for the work that was carried out. Examples of this are bank transfer, online banking, payment card or MobilePay. You must therefore remember to provide your customers with your account number, a giro transfer form or allow them to pay by card. If you are paid in cash by your customers, they are not entitled to a deduction.