Selling in EU from Denmark – Tax Rules Explained for Businesses

Understanding the Basic Framework: Denmark Inside the EU

Selling from Denmark to customers in other EU countries is not “export” in the classical customs sense, because all member states participate in the EU single market. Instead, the core issue is VAT treatment: whether to charge Danish VAT, foreign VAT, or no VAT at all, and how to report it. Direct taxes (like corporate income tax) also matter, but they usually stay in Denmark unless you create a taxable presence abroad.

From the outset, you must distinguish between three key factors:

1. Where your business is established (in this case, Denmark).

2. Who your customer is (private consumer – B2C, or business – B2B).

3. What you are selling (goods, digital services, other services).

These three elements determine if you use Danish VAT, the VAT of the customer's country, or special schemes such as the One Stop Shop (OSS).

VAT Registration and Danish Obligations as a Starting Point

Any Danish business selling within the EU must first be properly registered in Denmark. You need:

- A CVR number (business registration number).

- A Danish VAT number (usually the same digits as the CVR, but with specific VAT identification).

Once registered, you must:

- Charge Danish VAT on domestic sales (unless exempt).

- File Danish VAT returns within the deadlines applicable to your turnover level.

- Keep proper records of all EU cross‑border supplies and purchases.

From this Danish base, you then layer on the EU cross‑border rules. You cannot skip Danish registration and attempt to rely only on an EU scheme like OSS; your Danish registration is always the anchor point.

Selling Goods B2B Within the EU: Intra‑Community Supplies

When a Danish company sells goods to a VAT‑registered business in another EU country, this is usually treated as an “intra‑Community supply” of goods. The typical structure is:

- The Danish supplier does not charge Danish VAT, provided:

- The customer has a valid VAT number in another EU country, and

- The goods are physically transported from Denmark to that country.

- The customer accounts for VAT in their own country under the reverse charge mechanism (intra‑Community acquisition).

The invoice must show:

- The VAT numbers of both parties (supplier and customer).

- A clear reference such as “Intra‑Community supply – reverse charge” or an equivalent legal note.

- Zero VAT rate applied, but with the legal basis implied by the wording.

In your Danish VAT return, you declare the value of these supplies, and you also report them in the EC Sales List / EU sales listing (salg uden for Danmark) to Skattestyrelsen, specifying the customer's VAT number and amounts.

If you fail to collect and verify the VAT number or cannot prove transport across borders, the Danish authorities may consider the transaction domestic and demand Danish VAT, so documentation and proper invoicing are critical.

Selling Goods B2C: Distance Selling and the OSS Regime

For sales of goods to private consumers in other EU countries, the rules changed meaningfully when the EU introduced a unified distance‑selling threshold. Danish sellers must now monitor the total value of cross‑border B2C sales of goods and relevant services to all other EU countries combined.

Below the common threshold, you generally charge Danish VAT on these sales and report them in your Danish VAT return. Once you exceed the threshold, you must start charging the VAT rate of the customer's country for those B2C sales.

To avoid multiple foreign VAT registrations, you can use the OSS (One Stop Shop) scheme:

- You register for OSS in Denmark via Skattestyrelsen.

- You charge the VAT rate applicable in the customer's country on B2C cross‑border sales covered by OSS.

- You submit one OSS return in Denmark, paying all foreign VAT through that portal.

- Denmark then distributes the VAT to the respective EU countries.

Sales outside OSS coverage may still require individual foreign VAT registrations, particularly if you hold stock in another EU country or run local warehouses (for example via a foreign fulfillment center). In those situations, you may create a taxable presence and have to charge local VAT from that stock location.

Digital Services and Electronically Supplied Services

Digital services (such as downloadable software, streaming, online platforms, and electronically supplied services) have their own cross‑border VAT rules. For B2C digital services within the EU, VAT is generally due in the customer's country, not in Denmark, regardless of turnover thresholds.

Danish businesses selling such digital services to EU consumers typically:

- Determine the customer's location based on objective evidence (billing address, IP address, bank details).

- Charge the VAT rate applicable in that country.

- Use the OSS scheme (specifically the union scheme) to report and pay that VAT via Denmark.

For B2B digital services within the EU, the standard reverse charge rule for services often applies. The Danish provider invoices without VAT, and the business customer accounts for VAT in their country. Again, the invoice must clearly state the reverse charge reference and show the customer's VAT number.

General B2B Services: Place of Supply and Reverse Charge

Outside the specific categories of goods and digital services, many “general” services (consulting, marketing, legal, engineering, software development) follow the B2B “place of supply” rule: the service is deemed supplied where the customer is established.

When a Danish company provides such a service to a VAT‑registered business in another EU country:

- The Danish supplier does not charge Danish VAT.

- The invoice states the customer's VAT number and a note about reverse charge.

- The foreign customer self‑assesses VAT in their own VAT return.

These services still count as EU supplies of services in your Danish VAT accounting, and they must be properly documented. If the customer is not VAT‑registered (B2C), the rule may shift and Danish VAT may apply, except for certain categories with specific place‑of‑supply rules (for example, services related to real estate, events, or passenger transport).

Invoicing Requirements for EU Cross‑Border Sales

Proper invoicing is essential for VAT compliance and to ensure your customers can correctly account for VAT in their own countries. For cross‑border sales from Denmark, your invoices should generally include:

- Your Danish VAT number.

- The customer's VAT number for B2B intra‑EU supplies and services under reverse charge.

- A clear description of the goods or services, including quantity, date, and delivery details.

- The applicable VAT rate and amount, or a statement that VAT is not charged (with the reason, such as “reverse charge,” “intra‑Community supply,” or “outside scope”).

- The total amount payable in the invoice currency.

Electronic invoices are acceptable across the EU, but you must ensure integrity and authenticity, for example through secure accounting systems, audit trails, or e‑signature solutions. Keep invoices and supporting documents (contracts, transport proofs, correspondence) for the retention period required by Danish law and, where applicable, by the customer's country.

Corporate Income Tax: When Do You Pay Tax Outside Denmark?

VAT is only one side of cross‑border selling; income tax is another. As a rule, a Danish company that simply sells to customers in other EU countries without a physical presence there remains taxable in Denmark on its profits. The mere fact that customers are located abroad does not automatically create corporate income tax obligations in those countries.

However, you may create a permanent establishment (PE) abroad if:

- You maintain a fixed place of business in another country, such as an office, workshop, or warehouse that you control; or

- You have a dependent agent with authority to habitually conclude contracts on your behalf in that country.

If a PE arises, the foreign country may claim taxing rights over the profits attributable to that establishment, based on double taxation treaties. You would then be required to:

- Register for corporate tax in that country.

- File returns and possibly pay both corporate tax there and in Denmark, with credit or exemption relief to avoid double taxation.

Planning your logistics, staff deployments, and warehouse use is therefore crucial. Some models, like independent distribution partners or third‑party logistics (3PL) warehouses, may reduce the risk of permanent establishment, but each arrangement must be evaluated individually.

Record‑Keeping, Documentation, and Audit Preparedness

Selling across borders multiplies the number of potential audit points. Danish and foreign tax authorities increasingly share information and compare VAT listings, OSS returns, and intra‑EU trade data. To minimise risk, you should:

- Maintain accurate, granular records of all EU sales and purchases, separated by country and by type (goods, services, digital).

- Store evidence of transport for intra‑Community supplies of goods (CMR consignment notes, carrier invoices, delivery confirmations).

- Keep proof of customer status (VAT numbers, VIES checks, contracts) to support reverse charge treatments.

- Retain OSS filings and the underlying transaction data.

Robust accounting systems and invoicing solutions that automate VAT decisions based on customer location, status, and product type can significantly reduce human error.

Strategic Outlook for Danish Businesses Expanding in the EU

While the rules surrounding VAT, OSS, distance selling, and permanent establishments may appear complex, they are also predictable and standardised across the EU. For Danish businesses, this means that once you build a compliant framework, you can scale sales into multiple EU countries without redesigning your tax approach for each new market.

Key strategic considerations include:

- Deciding when to adopt OSS to simplify VAT obligations.

- Evaluating whether local warehousing or fulfilment centers justify the additional VAT and corporate tax compliance.

- Designing contracts and commercial structures to minimise unintentional permanent establishments.

- Investing in invoicing and accounting tools capable of managing multi‑country VAT rates and reporting.

With careful planning, selling from Denmark into the wider EU can remain administratively manageable, allowing you to focus on growth, while staying within the boundaries of Danish and EU tax rules.