E-Invoicing in the State of Denmark: The Bookkeeping Act

General: The New Bookkeeping Act and E-Invoicing

The concept of e-Invoicing is not new to Denmark. The Danish Parliament has been implementing Danish tax legislation to regulate the exchange of electronic invoices as early as 2005. In November of 2024, Denmark released an executive order that requires Danish companies to send e-invoices to public institutions.

Recently, new amendments have been brought to the Danish Bookkeeping Act. Setting out a list of new requirements for companies using digital accounting systems. The 2023 New Danish Bookkeeping Act (hereinafter referred to as the 'Act') aligns with the global initiative of digitalisation, in relation to accounting records. The Act, furthermore, prescribes a timeline for the compliance with the new bookkeeping obligations and regulations. The timeline has been divided between registered accounting software systems (July 2024) and non-registered accounting software systems (January 2025), with the final deadline being imposed on personally owned businesses, with an annual net turnover of more than DKK 300,000 in two consecutive years (e.g. 2024 and 2025).

The Denmark Timeline Breakdown

1. From 1 July 2024: Business entities with an imposed responsibility to submit an annual report to the Danish Government under the Danish Financial Statements Act, the utilises a 'registered' accounting program, must account digitally from the first date they start a new financial year.
2. From 1 January 2025: Business entities with an imposed responsibility to submit an annual report under the Danish Financial Statements Act, that utilises a 'non-registered' accounting program, must account digitally from the first date they start a new financial year.
3. From 2026: Privately owned entities with an annual turnover exceeding DKK 300,000, for two consecutive years, must comply and account digitally.

The new bookkeeping law proposes that almost ALL business entities will be required to use a compliant accounting program.

How does The Bookkeeping Act relate to e-Invoicing?

The Act has been amended to include new definitions and new technical specifications in relation to digital accounting and reporting software or programs.

This includes the added definition of 'e-Invoicing', as set out in Part 1 Section 3(viii) of the Act, referring to an invoice or credit note created, sent or received in a structured electronic format, making it capable of automatic ingestion and processing.

As well as, but not limited to, the listed Requirements for bookkeeping systems. The requirements can be surmised as follows:

• A Digital Bookkeeping System should have the ability to support the current record keeping process of the business entity's transactions, in addition, securing the storage of records. Business entities must reliably store accounting records for 5-years from the end of the financial year which the records relate.
• A Digital Bookkeeping System should comply with the recognised cybersecurity standards, including user and access management. The digital bookkeeping system will have to automatically backup all posted transactions at least once a week. The 'back-up' copy is to be stored on a server within an EU or EEA country.
• A Digital Bookkeeping System should be able to support the automation of the administrative process, i.e. a standard Digital Bookkeeping System must have the ability to send and receive structured electronic invoices and credit notes with the associated receipts in the formats:
  • OIOUBL (a standard that supports national trade); and
  • Peppol BIS (a standard that supports international trade across borders).

The sending function is configured to digitally send the information that the supplier needs in order to create and send the invoices. Such a solution can be based on an integration with a supplier of a European e-invoicing standard module, that being eezi – Powered by VATit.

• The Digital Bookkeeping System should be able to reconcile the accounting records with the business entity's bank account. The system must clearly identify and display the differences or display same in a separate reconciliation module in the instance an entry is not reconciled with the business entity's bank account.
• A Digital Bookkeeping System should support the export of data by way of a standard file, a defined by the Danish Authorities (so-called 'SAF-T' files). SAF-T files are a European OECD standard for processing accounting data.

In conclusion, the Act prescribes only the ability to send and received digital invoices as a requirement of a compliant Accounting Software. Thus, there is no specific e-Invoicing mandate requiring a group of companies, varying from field of enterprise to threshold income, to issue invoices.

What is the difference between a registered accounting software and non-registered accounting software?

The difference can be outline simply.

A registered accounting system is a system that has been registered with the Danish Business Authority. This would ensure the system's compliance with the legal requirements, as the process of registration would require strict adherence.

A non-registered accounting system is a system that has not been registered with the Danish Business Authority. This, nevertheless, does not infer a system's non-compliance, as a non-registered digital bookkeeping system is still required to adhere to the requirements as stipulated by law. It is, however, not gauranteed.

A further contrast between registered and non-registered certified digital bookkeeping, is the deadline for compliance with the Bookkeeping Act, as set out above.

Denmark e-Invoicing Platforms?

In paragraph 3, reference was made to two different e-Invoicing formats, being OIOUL and Peppol BIS 3.0.

Denmark has two operational platforms utilised for e-invoicing. The Danish NemHandel platform as well as the Peppol Platform. The Danish government mandates the use of NemHandel for the exchange of invoices in the B2G public procurement sector, including national level transactions. The format exchanged on this platform is OIOUBL. The alternative, being via the Peppol Netword platform, utilised for international (non-domestic) transactions and digital invoices are exchanged in the Peppol format.

1. Approach for receiving and handling electronic invoices

A private entity or public institution that elects to or is required to receive digital invoices via NemHandel, should register in the NemHandelRegistry (NHR). The process is simple, whereby the elected entity submits their correct CVR (central business register) number and GLN (global location number) number if applicable to the NHR. The CVR or GLN is used to send invoices.

In the alternative, if the user elects to utilise the Peppol-platform, the entity will have to obtain a PeppolID. This will be used as an identifier to obtain invoices sent to the elected Peppol access point, using the entities PeppolID.

How to support e-Invoices using a supplier (eezi – Powered by VATit)

• The initial step will be to enter into an agreement with eezi - an e-Invoicing module - that support both OIOUBL and Peppol.
• The entity's ERP must be configured to send the required information (invoice fields) that eezi will need to create and exchange the relevant e-Invoice. Depending on the entity's preference or needs, the entity can integrate into eezi in various ways or elect a manual option.
• The entity's system is the configured to send and receive data from eezi.

NOTE: The use of a supplier limits the administrative burden of a business entity.

Closing Remarks

In the Danish e-Invoicing and electronic accounting-space a lot of steps have been taken, and regulations have been implemented to support the current global initiative of digitalisation. The ease with which the regulations are imposed and the support structure established by service providers create an encouraging landscape for business entities.

To clarify, there is a difference between an e-Invoicing mandate and the digital bookkeeping software mandate. Business entities (B2B & B2C transactions) are not mandated to send e-invoices, but in order to comply with the Danish Bookkeeping Act, business entities must make use of a compliant electronic bookkeeping software that has the ability to send and receive e-invoices.

It is also safe to assume that due to the imposition of the Bookkeeping Act and what it entails, an e-Invoicing mandate is not impossible in the future.

Do you need to sendelectronic invoices/reports in Denmark? eezi – Powered by VATit can help with that!