When Sofia, an entrepreneur from Spain, decided to expand her small design agency to Denmark, she expected a friendly business environment — and she found one. But she also learned that accounting here is more than just a legal requirement; it’s a rhythm that keeps the business in tune with Danish rules, deadlines, and digital systems. This is her first-year journey, and how accounting in Denmark shaped each stage.
Month 1–2: Registration and first steps
The first step was registering the business in the Central Business Register (CVR). With her Danish MitID in place, Sofia completed the online application in under an hour. She chose to register for VAT immediately, even though her expected first-year turnover was below the 50,000 DKK threshold. Why? Because it allowed her to claim VAT back on business expenses from day one.
She also had to decide how to keep her accounts. Rather than tracking invoices in spreadsheets, she subscribed to Dinero, a cloud-based accounting system designed for Danish regulations. Within a week, she had her bank account integrated and a basic chart of accounts ready.
Month 3–4: Getting used to the Bookkeeping Act
By spring, Sofia was getting familiar with Bogføringsloven — the Bookkeeping Act. She learned that every transaction had to be documented and stored for at least five years. Even small expenses like coffee for a client meeting had to be entered into the system with a receipt attached.
The rule felt strict at first, but the digital setup made it easy. Receipts could be photographed with her phone, uploaded into Dinero, and matched to the relevant bank transaction automatically.
Month 5–6: Understanding VAT cycles
In June, it was time for her first VAT return. Because her turnover was low, she was on the half-yearly reporting schedule, but she treated this as a rehearsal for more frequent reporting in the future.
The system was straightforward: Dinero generated a VAT report, she reviewed it for errors, and submitted it via TastSelv Erhverv — the online platform of the Danish Tax Agency (SKAT). The entire process took under an hour, a pleasant surprise for someone used to more paperwork-heavy systems abroad.
Month 7–9: Preparing for growth
By late summer, the business was picking up speed. Sofia hired a part-time assistant and began taking on clients from other EU countries. This introduced a new challenge: cross-border VAT rules.
She discovered that sales to clients in other EU states could be zero-rated, but only if she recorded their VAT number and reported the transaction correctly. With her accountant’s guidance, she added a process for validating EU VAT numbers and tagging invoices in her accounting software.
Month 10–11: The audit question
As turnover increased, a fellow entrepreneur asked if she was worried about audits. Sofia learned that in Denmark, mandatory audits only apply to companies exceeding two out of three thresholds for two consecutive years:
- total assets over 44 million DKK,
- net revenue over 89 million DKK,
- more than 50 full-time employees.
Her small agency was far from those numbers, but the discussion was a reminder of the importance of keeping records neat and accessible in case SKAT ever requested them.
Month 12: Closing the first year
At the end of her first year, Sofia’s accountant prepared the annual tax return and submitted it digitally. The clear, up-to-date bookkeeping made the process smooth — there was no hunting for missing invoices or correcting outdated records.
Looking back, Sofia realised that what initially seemed like a set of strict rules was actually a system designed for efficiency. By embracing Denmark’s digital-first approach, she had more time to focus on her clients and less on paperwork.