According to the new Bookkeeping Law, which came into force on 01.07.2022 in Denmark, eInvoicing has become mandatory. The law requires businesses to exchange and archive invoices electronically. At the same time, the new law strengthens the work against fraud and errors in VAT and tax returns. Whether the digital bookkeeping requirement will take effect for the individual company depends on the company type and turnover.
Software providers of digital invoicing and accounting-related services in Denmark must register with the Danish Business Authority (Dan.: Erhvervsstyrelsen) and obtain a “digital bookkeeping system” status.
The Danish Business Authority is preparing a template for the bookkeeping procedure. The template and guidance information are expected to be published on the Danish Business Authority website in early autumn 2022.
The New Bookkeeping Law
The new bookkeeping law means major accounting changes as it increases IT systems’ use.
We can briefly look at the important changes made in the law:
- Organizing and executing the bookkeeping method according to the type of company, the number of transactions and the financial scope of the transactions.
- Ensuring that VAT, taxes and fees have an up-to-date basis
- Transferring the bookkeeping obligation to the digital environment and providing the necessary infrastructure for this
- Requirement for providers of digital bookkeeping systems operating in the Danish market to have their systems certified
On the other hand, liability for companies that will use publicly approved systems will begin on 1 January 2024.
Companies with a turnover exceeding DKK 300,000 (approximately € 40,304) are expected to meet their bookkeeping obligations after 1 January 2026.
Scope of the Law
- Business companies incorporated in Denmark: Joint stock and limited companies, business foundations, cooperatives, sole proprietorships
- Business activities (branches) carried out by foreign companies in Denmark
- In case the branch turnover exceeds DKK 300,000 for two consecutive years, it is covered by the new rules on digital bookkeeping according to DBA.
Requirements for Digital Bookkeeping Providers
A digital bookkeeping system is understood as “digital software that includes functions where companies subject to bookkeeping can record transactions with a provider or other third party and store records and attachments on a server.
In this context, digital accounting providers must meet the following requirements:
- Display attachments for each record and secure storage of attachments for five years
- Meet recognized standards for IT security and ensure automatic backup of records and attachments
- Support the automation of administrative processes, including the automatic sending and receipt of eInvoices, and accounting according to the general standard chart of accounts used in the Danish accounting system
Providers should in any case report their systems to the DBA and check that their systems meet the requirements of the accounting system.
Timeline for the implementation of the new bookkeeping law
