SME Scheme – General features
Exemption
It is possible to opt for the SME scheme in Denmark.
Transactions excluded from the SME scheme
The following transactions are excluded from the SME scheme:
- Exempt cross-border supplies of new means of transport made from one Member State to another.
Making an occasional transaction does not automatically make you liable for VAT in Denmark, if the transaction is not made as part of you doing business. This also means that the SME scheme does not apply to such occasional transactions.
National annual thresholds
Denmark applies two national VAT thresholds:
- General VAT threshold for any goods and services (DK01), DKK 50,000, except first-time sales of certain works of art
- First-time sales of certain works of art (DK02), DKK 350,000 (including up to DKK 50,000 of any other goods and services)
The information on the national annual thresholds is available on TEDB.
Sales of goods and services (DK01)
As a general rule, you are subject to the general VAT threshold if you sell goods and services subject to VAT. This means that you must register for VAT when your turnover exceeds DKK 50,000 in a calendar year. You must register and pay VAT from the sale which causes you to exceed this amount, including that transaction.
Supplies of goods and services should be specified as sector code "DK01".
First-time sales of certain works of art (DK02)
If you have turnover from first-time sales of certain works of art, you must register for VAT when your total turnover exceeds DKK 350,000 in a calendar year.
However, you are still subject to the general VAT threshold. This means that you must still register for VAT when your turnover from other goods and services exceeds DKK 50,000 in a calendar year.
You must register and pay VAT from the sale which causes you to exceed either amount, including that transaction.
Supplies of first-time sales of certain works of art must be transmitted by the Member State as sector "DK02", or in case of free-text entered by the small enterprise, as "DK02", "works of art" or "artworks".
Works of art subject to this threshold
Only specific types of physical artistic objects are included under the threshold.
Artisanal goods of a commercial nature, e.g. crafts or handmade commercial goods for decoration and ornamentation are not included.
Types of objects included under the threshold
- Goods falling within CN 9701 (paintings, collages etc., drawings, and pastels, executed entirely by hand), and goods falling within CN 9702 (original engravings, prints and lithographs).
- Sculptures falling within CN 9703, created by the artist, including up to 8 castings of a sculpture. The limit of eight copies may be exceeded for statuary casts produced before 1 January 1989, if the sculpture cannot be considered a good for resale.
- Tapestries and wall textiles falling within CN 5805 and 6304 made by hand from original designs provided by artists, provided that there are not more than eight copies of each
- Individual pieces of ceramics executed entirely by the artist and signed by him
- Enamels on copper, executed entirely by hand, limited to eight numbered copies bearing the signature of the artist or the studio, excluding articles of jewellery and goldsmiths' and silversmiths' wares;
- Photographs taken by the artist, printed by him or under his supervision, signed and numbered and limited to 30 copies, all sizes and mounts included.
Only first-time sales are subject to this threshold
The first time an object is sold, i.e. when ownership is transferred in exchange for payment, is a first-time sale. Your total annual turnover from such first-time sales is subject to this threshold regardless of the number of works you have sold.
Other forms of economic utility from the object are not included under this threshold. These include rental, leasing, royalty agreements, etc., which should instead be included under the threshold for goods and services.
It is your responsibility to document that a sale of a work of art is a first-time sale, i.e. if you did not create the work of art yourself, but acquired ownership of it through a gift, inheritance, or from the distribution of an estate.
Domestic SME scheme
A small enterprise established in Denmark who only applies the SME scheme in Denmark (the domestic SME scheme) is released from the following VAT obligations:
- to state the beginning of its activity
- to register as business
- to register for VAT
- to submit periodical VAT returns
- to submit administrative statements
Cross-border SME scheme
The cross-border SME scheme applies in the following situations:
- The small enterprise applies the SME scheme in other Member States than the Member State of establishment, or;
- The small enterprise applies the SME scheme both in the Member State of establishment and in other Member State(s).
Simplified VAT obligations
VAT registration in each Member State where a small enterprise established in Denmark seeks to apply the SME scheme is replaced by a single prior notification to be submitted in Denmark as Member State of establishment. The small enterprise established in Denmark must first be registered in the Danish central business registry, CVR.
VAT registration in Denmark when a small enterprise established in another Member State seeks to be VAT exempted in Denmark, is replaced by a single prior notification to be submitted through the Member State of establishment.
The periodical VAT returns are replaced by a single quarterly report for all Member States to be submitted in the Member State of establishment.
Currency
The values of supplies of goods and services stated in the prior notification and updates to a prior notification, as well as in the quarterly and final reports, must be in DKK
Values of supplies of goods and services submitted through other Member States must be transmitted in EUR.
Way of submission
The prior notification, the updates to a prior notification, the quarterly and final reports, and cessation for small businesses established in Denmark must take place through the Danish Tax Administration's self-service portal, E-tax.
Additional simplified VAT obligations and sanctions
Exempt small enterprises applying the cross-border SME scheme in Denmark are released from the obligation to issue full invoices for B2C supplies, when the single supply does not exceed DKK 5,000.
If an exempt small enterprise has indicated VAT on its invoice by mistake, the amount must be paid to the Danish Tax Administration, if not corrected towards the buyer. Violation of this rule is a criminal offence.
An exempt small enterprise which does not comply with its reporting and information obligations may be subject to a fine.
Transitional period
Denmark does not apply any transitional period in case the VAT thresholds are exceeded during the current calendar year (see the TEDB database).
You must register and pay VAT from the sale which causes you to exceed the threshold, including that transaction.
Quarantine
Quarantine period in case of exclusion from the SME scheme
A small enterprise excluded from the SME scheme in Denmark is not able to benefit from the scheme during that calendar year and the following calendar year (see the TEDB database).
Quarantine period in case of voluntary departure from the SME scheme
There will be no quarantine period imposed (see the TEDB database).
Appeals
Domestic SME scheme
There is no prerequisite to apply the domestic SME scheme.
Cross-border SME scheme
Denmark as Member State of establishment (MSEST)
You should follow the instructions to appeal contained in the decision document from the Danish Tax Agency.
Denmark as Member State of exemption (MSEXE)
You should follow the instructions to appeal contained in the decision document from the Danish Tax Agency.
Another state as Member State of exemption (MSEXE)
You should follow the instructions to appeal contained in the decision document from the Member State of exemption, or contact the national tax administration for guidance.
Calendar
Working days in 2026
Monday through Friday, except:
- January 1st
- April 2nd and 3rd
- April 6th
- May 14th and 15th
- May 25th
- June 5th
- December 24th to 31st