Reverse charge means that it is the buyer and not the seller who must calculate and report VAT to the Danish Tax Agency. This typically happens when you trade with foreign suppliers or when certain types of goods and services are traded between Danish companies.
Reverse charge applies in the following situations:
- When a good or service is sold across borders between VAT-registered businesses in the EU.
- When trading selected goods in Denmark, such as mobile phones, tablets, laptops and gaming consoles.
Reverse payment obligation when trading in Denmark
Danish companies can also receive reverse charge invoices from other Danish companies. The scheme is used to prevent VAT evasion in industries with a high risk of fraud. Therefore, as a buyer, you must calculate the VAT yourself, report it as both sales and purchase VAT and ensure correct bookkeeping.
How to account for reverse charge
When you receive a reverse charge invoice, you need to use the correct VAT codes in your accounting system:
- OBPK in Dinero
- OBPK in e-conomic
- Buying with reverse charge in Billy
It’s important that the VAT is calculated correctly, otherwise the company may risk errors in VAT reporting.
Get help with bookkeeping and advice
Not sure how to handle reverse charge invoices or which rules apply to your business? At Accountview, we help you set up your bookkeeping correctly in Dinero, e-conomic or Billy to avoid errors and comply with VAT regulations.
