Introduction to the Danish Bookkeeping Act
The Danish Bookkeeping Act, in Danish “Bogføringsloven”, outlines the principles and requirements for digital accounting and bookkeeping in Denmark. It includes several immediate tax-related obligations for businesses, such as:
- Supporting the automatic sending and receiving of e-invoices in OIOUBL/PEPPOL BIS.
- Enabling the sharing of bookkeeping data in SAF-T format.
Beyond these tax-related requirements, the Act imposes broader bookkeeping obligations, including but not limited to:
- Performing necessary tax reconciliations for each tax-relevant filing.
- Registering all company transactions in compliance with bookkeeping standards.
- Maintaining an audit trail for recorded transactions.
- Digitally storing purchase and sales invoices.
- Conducting a full backup of stored data weekly with an independent party inside the EU that meets IT security standards.
These regulations aim to enhance financial transparency, data security, and compliance within Denmark’s digital bookkeeping framework.
Furthermore, the Act distinguishes between approved and non-approved digital bookkeeping systems, where the requirements can differ and the responsibility to comply can lie with either the company or the ERP provider. For non-approved systems, the responsibility lies with the company.
It is therefore important to determine which category one's bookkeeping system belongs to, and which associated requirements must be met and how to meet them. This could have an impact on when the requirements are/become applicable (depending on the financial year of the entity):
- 1 July 2024 (past): Digital bookkeeping applies for approved ERP systems
- 1 January 2025 (present): Digital bookkeeping applies for non-approved ERP systems for most companies in Denmark
- 1 January 2026 (future): Digital bookkeeping applies to all entities with net annual turnover over DKK 300,000 (approx. EUR 40,000), including foreign companies with branches in Denmark
SAP has clarified that SAP S/4HANA is not officially recognised as a standard bookkeeping system under the Danish Bookkeeping Act. Therefore, it is the client's responsibility to ensure that they are in compliance with the Danish Bookkeeping Act. To help you with this, PwC can perform a ‘compliance validation’. This process helps you identify and address any compliance gaps related to the Danish Bookkeeping Act, which encompasses more than just VAT requirements (such as SAF-T, e-invoicing, etc.). It also includes requirements related to:
- Ensuring a control trail for accounting data
- Availability of banking data
- Reconciliation of banking data
- Regular backups of data
E-Invoice compliance under the Act
As mentioned, companies must be able to automatically send and receive e-invoices in Peppol and OIOUBL format. OIOUBL is a Danish e-invoicing standard maintained by the Danish Business Authority and is typically used for transactions with Danish government entities via the NemHandel platform.
Peppol, another accepted e-invoicing format under the Danish Bookkeeping Act, is a globally recognized standard. To use Peppol, companies need a certified Peppol access point before engaging in Peppol e-invoicing. Additionally, it's crucial to ensure that your customers are registered on the Peppol network; otherwise, your e-invoices may not reach their intended destination.
The requirements in the Danish Bookkeeping Act outlines the requirements to system capabilities. The Danish Tax Agency has not (yet) mandated the use for VAT taxable B2B or B2C transactions, but the legislations are expected to align in the near future (likely to be introduced in 2028).
Next to the strict Danish obligation, also ViDA is around the corner (2030), which impacts your EU cross border transactions with the EU wide implementation of Digital Reporting Requirements (DRR). One aspect of the DRR is to move cross border trade closer to real-time reporting by abolishing the periodic recapitulative statements (e.g. EU sales listings) and instead mandating the suppliers to report the cross border trade within 10 days of the chargeable event. This coincides with the e-invoicing requirements, that are also part of the DRR, where e-invoices is the new default for invoicing and e-invoices must be issued within the same time frame.
Since more and more countries have implemented, will implement or plan to implement a kind of e-invoicing, it is a good business decision to look at all obligations in the EU and beyond and try to harmonise your e-invoicing solution(s) which will lower your IT cost & maintenance over time.
At PwC we have a solution called ‘Electronic Compliance Radar’ which helps you to keep track of upcoming/current e-invoicing/e-reporting obligations in more than 100 countries. For more information, please visit our website.
SAF-T (Standard Audit File for Tax)
The new Bookkeeping Act requires bookkeeping systems to support the SAF-T international standard file format. This facilitates easier and more secure data exchanges between companies, such as with the Danish Tax Agency, and simplifies switching bookkeeping systems.
Currently, companies are not mandated to regularly submit SAF-T files to authorities. However, bookkeeping systems must be capable of generating, loading, and exporting SAF-T files if requested by the Danish Tax Agency, such as during a VAT or tax inspection. The current obligation requires businesses to produce a SAF-T file on header level. However, this requirement is likely to be extended to all transactions (purshares and sales) by 2028 and with further reporting requirements in the subsequent years.
Implementation in SAP Document and Reporting Compliance (hereafter SAP DRC) for DK e-invoicing and SAF-T
SAP offers a solution called SAP Document and Reporting Compliance to assist with indirect tax and e-invoicing reporting obligations globally.
In Denmark, SAP DRC can generate from a reporting perspective:
VAT return (where Electronic submission of the VAT return is on the roadmap for delivery)
EC Sales Listings
The header details of the Danish SAF-T (SAP intends to deliver full SAF-T, once more root elements become mandatory).
From an e-reporting/e-invoicing perspective:
Peppol e-order
Integration to Nemhandel (on the roadmap for delivery).
At PwC, we have already implemented these requirements in our demo system. If you would like to learn more about our experiences and best practices, please feel free to contact us. Do not hesitate to ask any questions.
