E-Commerce & B2C Services in Denmark
The implementation of the EU VAT reform starting from July 1, 2021 has implications for e-commerce businesses engaged in cross-border transactions within the EU or importing goods from outside the EU. The introduction of the One-Stop-Shop (OSS) scheme enables enterprises to register for VAT and submit quarterly VAT returns in a single EU country. Additionally, a specific framework known as the Import One-Stop-Shop (IOSS) is established for imported goods.
Read more about E-Commerce & B2C services in Denmark in our comprehensive guide.
B2C Services in Denmark
Non-residents Not Established in Denmark
VAT registration thresholds do not apply to businesses that do not have a Danish establishment. These businesses generally must register for Danish VAT at any time, if they make taxable supplies in Denmark. They must also register if they make intra-Community acquisitions in Denmark that exceed the intra-Community acquisition threshold.
Inbound Business-to-Consumer Services and the One Stop Shop
Foreign suppliers who are not based in Denmark and provide business-to-consumer (B2C) services with a place of supply in Denmark are generally obligated to register for Danish VAT.
Starting from July 1, 2021, foreign providers of B2C services have the option to simplify their registration and reporting obligations across all EU Member States by registering for the EU-wide “One Stop Shop” (OSS) scheme in a single Member State. It is important to note that inbound B2C telecommunications, broadcasting, and electronically supplied services (TBE services) are typically treated as supplied in Denmark. This means that VAT obligations for these services usually apply in Denmark.
In some cases, the TBE service supplier subject to registration requirements is an intermediary, e.g., a telecommunications network, an interface, or a portal such as an app store, and not the initial supplier of TBE services, such as the electronic content owner. Rules on identifying the TBE supplier are provided in Article 9a of the EU VAT Implementing Regulation.
Selling in Denmark?
B2C Supplies of Telecommunications, Broadcasting and Electronically Supplied Services
In general, services provided to individual customers are considered to be provided at the location where the supplier is based. As a result, certain inbound services may not be subject to taxation in Denmark.
However, specific rules regarding the place of supply apply to inbound business-to-consumer telecommunications, broadcasting, and electronically supplied services (TBE services). According to these rules, such services are treated as if they were supplied in Denmark, regardless of the supplier’s location.
It follows that a supplier must generally register in Denmark if it supplies TBE Services to Danish consumers. On or after July 1, 2021, foreign suppliers may use an EU-wide “One Stop Shop” (OSS) registration scheme to register in one EU Member State to account for all their EU B2C supplies. Before that date, a similar simplification, referred to as the “Mini One Stop Shop” was in force.
Download the Danish VAT Guide
New E-commerce rules in the EU
The implementation of the EU VAT reform starting from July 1, 2021 has implications for e-commerce businesses engaged in cross-border transactions within the EU or importing goods from outside the EU. The introduction of the One-Stop-Shop (OSS) scheme enables enterprises to register for VAT and submit quarterly VAT returns in a single EU country. Additionally, a specific framework known as the Import One-Stop-Shop (IOSS) is established for imported goods.
The One-Stop Shop (OSS) model aims to simplify tax compliance and alleviate administrative burdens for businesses while enhancing tax collection for certain digital products within the European Union. By utilizing the OSS scheme, businesses can register for VAT and manage their VAT returns in a single country, eliminating the need to track various distance selling thresholds in multiple countries. The previous annual distance selling threshold of €100,000 for Germany, for example, will be replaced by a standardized EU-wide threshold of EUR 10,000.
The OSS (One-Stop-Shop) is developed for EU enterprises selling goods to customers within the EU. In the EU, IOSS is meant for non-EU enterprises selling items worth up to EUR 150 to EU clients. In this case, ordinary VAT import regulations apply.
Last Updated: 27/12/2023
Disclaimer
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