Set up Danish taxes in your Shopify store

In this article we will discuss

• Tax settings
• Tax rates in Denmark and the EU
• Selling goods to customers in Denmark
  • My business is not VAT-registered
  • My business is VAT-registered
• Selling goods to customers in other EU member states
  • Selling as a micro-business
  • Surpassing the micro-business threshold
  • Country-specific registration
  • Selling digital goods
• Selling goods outside the EU

If you want to charge VAT to some customers but not others, you have two options, depending on how you would like to display product prices.

If you sell primarily to consumers (B2C), you may want to display product prices with VAT included.

To display your product prices with VAT included while still letting business customers have VAT deducted at checkout:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Global settings section, check the Include sales tax in product price and shipping rate checkbox.
3. Click Save to apply the changes.

Optionally, you can enable dynamic tax inclusion. This Shopify feature automatically includes or excludes tax based on the customer's region and adjusts the tax rate accordingly.

To activate dynamic tax inclusion:

1. In your Shopify admin, go to Settings → Markets and click the market you want to set up tax collection for.
2. Click Duties and taxes, and in the Storefront and checkout pricing field, click Edit.
3. In the Domestic taxes field, select Dynamic taxes. Click Done.
4. Click Save to apply the changes.

If you sell mainly to businesses (B2B), you'll probably want to display your product prices without VAT.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Global settings section, uncheck the Include sales tax in product price and shipping rate checkbox.
3. Click Save to apply the changes.

Optionally, disable the dynamic tax inclusion:

1. In your Shopify admin, go to Settings → Markets and click the market you want to set up tax collection for.
2. Click Duties and taxes, and in the Storefront and checkout pricing field, click Edit.
3. In the Domestic taxes field, select Don't add taxes. Click Done.
4. Click Save to apply the changes.

The standard VAT rate (MOMS, or Merværdiafgift) in Denmark is 25%. Unlike most EU countries, Denmark has no reduced rate; almost everything is taxed at the standard rate, with only a limited list of supplies zero-rated.

Whether you sell physical goods or digital services in the EU, the VAT rate you charge depends on your combined taxable turnover to other EU countries—and, as you'll see below, both count toward the same threshold.

If you're selling goods to customers in Denmark—whether businesses (B2B) or consumers (B2C)—you must charge Danish VAT.

If your business isn't VAT-registered, you don't charge VAT. You also can't include VAT on your invoices until you register your business for VAT.

If your business is based in Denmark and is VAT-registered, you charge VAT to some customers and not others, depending on where they're located.

If you're selling goods B2B to other EU member states, these sales are zero-rated for VAT.

This means you show VAT on your invoices at a 0% rate, while your customer accounts for the VAT under the reverse-charge mechanism.

If you're selling goods to consumers (B2C) in other EU member states, you charge VAT. The rate depends on whether your cross-border sales exceed the €10,000 EU distance-selling threshold.

As long as your combined taxable turnover in other EU countries (outside Denmark) stays at or below €10,000 (excluding VAT) during a calendar year, you're covered by the micro-business threshold.

No additional VAT registration or application is required while you remain below this threshold.

Once you're ready, set up your tax settings in Shopify admin to reflect this. This is a one-time task.

To set VAT rates and charge your home country's VAT rate on eligible EU sales:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using your home country registration.
5. Select your Country of registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet—you can update it later once you receive it.
6. Save your changes by clicking Collect VAT.

If the total value of your sales to any EU Member State exceeds €10,000 (excluding VAT) during a calendar year, you charge the VAT rate of the country you're shipping to.

This means you'll charge different VAT rates to customers in different EU countries, ranging from 15% to 27%.

Registering for VAT in every EU member state can be time-consuming.

In this case, you can use the One Stop Shop (OSS) scheme instead. It still lets you charge VAT at the rate of the country you're selling to, but you only need to file one OSS VAT return.

Shopify lets you set these tax settings for individual VAT registrations, so it can automatically charge the correct VAT to your EU customers.

To set VAT rates for the OSS scheme and charge your customers' shipping country VAT rate on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using a One Stop Shop (OSS) registration.
5. Select your Country of OSS registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet—you can update it later once you receive it.
6. Save your changes by clicking Collect VAT.

Some businesses choose to keep a separate tax registration for each EU country they ship to.

If that's your situation, you can add a local VAT registration number for that country in Shopify, which lets you charge the correct VAT rate.

Shopify will then automatically apply VAT rates based on your registration.

As a result, you'll charge different VAT rates to customers in different EU countries, depending on where you hold a registration.

For example, to charge your German customers the correct VAT rate, you need to add a German VAT registration number to your tax settings.

Adding a local VAT registration number is just as easy as adding your home country's.

To add a local VAT registration number:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT in an EU country section, click Collect in another location.
4. Select the Registration country and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet—you can update it later once you receive it.
5. Save your changes by clicking Collect VAT.
6. To add a local VAT registration number for every country you're registered in, click Collect VAT in an EU country again and confirm by clicking Collect VAT.

If you can't select the additional country you're VAT-registered in, you may need to create a shipping zone first.

To create a shipping zone:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click the shipping profile you want to add shipping zones to.
3. In the Shipping zones section, click Add shipping zone.
4. Enter a name for the shipping zone, add the country (or countries) you're VAT-registered in using the search bar, and click Done when finished.
5. Add shipping rates to make this zone available.
6. Click Save to apply the changes.

Special rules apply when selling digital goods from Denmark to other EU countries. But first, it's important to understand exactly what counts as a digital service.

Digital goods or services include radio and television broadcasting services, telecommunication services, and electronically supplied services, such as online magazines, music, films, and games.

Just because a company uses the internet to facilitate trading doesn't mean it provides e-services.

For example, selling goods where the order and processing happen electronically (as through a Shopify store) isn't a supply of digital services. This counts as a regular sale of goods and follows the usual VAT rules described above.

If you supply digital services from Denmark to other EU countries or to UK consumers, the same €10,000 threshold described above applies—digital sales count toward that combined EU-wide total alongside your physical goods sales.

As long as your combined turnover from goods and digital services to non-VAT-registered customers elsewhere in the EU stays below €10,000, you can keep charging Danish VAT.

Once that combined total exceeds €10,000, you must charge VAT at the rate of the customer's country for both goods and digital services going forward—ranging from 17% to 27%.

If you sell digital services to VAT-registered businesses (B2B), they're responsible for accounting for any VAT due in their own country.

Registering for VAT in multiple countries can be time-consuming. Shopify store owners in Denmark selling to other EU countries (excluding Northern Ireland, which is treated as non-EU for services) can register for the One Stop Shop (OSS) instead.

The OSS scheme lets you report the VAT due on your goods and digital services in your own Member State through a single web portal.

If you're selling goods from Denmark outside the EU—whether B2B or B2C—these sales are zero-rated for VAT. This means you don't charge VAT on your invoices.

Once you've set up your tax rates correctly in your store, Sufio automatically creates valid invoices with a detailed breakdown of the VAT charged.

Invoices can be created in multiple languages and include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is important for your bookkeeping and tax purposes.

If you are selling to businesses (B2B), Sufio invoices include all the required information, as well as the VAT registration numbers (CVR-nr. or Momsregistreringsnummer) of your business and your business customers.