Your own business in Denmark: CVR, VAT and tax
An overview of registering a sole proprietorship, when you must register for VAT, and how you pay tax on the profit.
How do you register a sole proprietorship?
If you want to work as self-employed in Denmark, a sole proprietorship (enkeltmandsvirksomhed) is the simplest form. You register the business at virk.dk and receive a CVR number. Registering a personally owned business is free of charge.
In a sole proprietorship, you and the business are the same person for tax purposes. The profit is taxed as your personal income, and you are personally liable for the business's obligations. The business must have a NemKonto linked to its CVR number, and this should be a business account.
When must you register for VAT?
Since 1 January 2025, you must register for Danish VAT (moms) if your turnover exceeds DKK 50,000 within a calendar year. Previously the threshold applied within a 12-month period. It is the turnover, meaning what you sell for, and not the profit that counts.
If your turnover is below the threshold, a personally owned small business (PMV, personligt ejet mindre virksomhed) may be an option. You then avoid VAT accounting, but you also cannot deduct VAT on your purchases. Once VAT-registered, you must file a VAT return by every deadline, even if you had no sales in the period.
How do you pay tax on the profit?
As self-employed, you do not pay yourself a salary. Instead, you enter the expected profit of the business in field 221 of your preliminary income assessment (forskudsopgørelse), or an expected loss in field 435. The assessment then shows whether you must pay B-tax in instalments or whether the tax can be withheld from your other income.
After the year ends, you report the final result in the extended tax return (udvidet selvangivelse) in TastSelv Borger. You can do this from March, and the deadline is 1 July. Keep your books up to date and save all bills and invoices so the figures are easy to find.
What if you have a business in Poland and work in Denmark?
If you carry out assignments in Denmark on a temporary basis through a Polish business, you must as a rule register with the Register of Foreign Service Providers (RUT). Self-employed people without employees only need to register, however, if they work in construction or in the installation and repair of machinery and equipment.
The registration must be made no later than when the work in Denmark begins. Whether the income is taxed in Denmark or Poland depends on factors such as where and for how long you work and on the double tax treaty between the two countries, so it should be assessed case by case.
Sources: Virk: Start a business and get a CVR number (in Danish) · Danish Tax Agency: First steps for new businesses (in Danish) · Danish Tax Agency: Personally owned small business, PMV (in Danish) · Danish Tax Agency: Tax on own business · Work in Denmark: Registration with RUT (in Danish)