What is the scope of the Act?
In 2022, Denmark introduced the Bookkeeping Act, which requires the digitization of all accounting processes. Under the law, businesses must use either certified digital bookkeeping software approved by the Danish Business Authority (Erhvervsstyrelsen) or a custom solution that complies with the act’s standards.
The law covers all accounting tasks, including invoicing, making B2B e-invoicing mandatory. Companies must use either the NemHandel platform or the PEPPOL network to send invoices. These invoices must follow the PEPPOL BIS 3.0 (EN16931-compliant) format or Denmark’s local OIOUBL format (with an updated version 3.0 that will also meet EN16931 standards).
When will the Bookkeeping Act in Denmark become mandatory?
The Danish Bookkeeping Act is expected to become mandatory in phases. As outlined in the official timeline of the Bookkeeping Act, the first phase took effect on July 1, 2024. This phase impacts companies that are obliged to submit an annual report under the Annual Accounts Act, focusing mainly on medium-sized and large enterprises already utilizing a certified bookkeeping system. From the start of their next financial year, these businesses are required to fully comply with the act by digitizing all accounting processes, including e-invoicing.
The upcoming phases of the Bookkeeping Act are as follows:
– January 1, 2025: The act will affect all companies required to submit an annual report under the Annual Accounts Act that are using self-developed bookkeeping software.
– January 1, 2026: The act will be extended to sole proprietorships with an annual net turnover exceeding DKK 300,000 for two consecutive years (e.g., 2024 and 2025).
This can either be done in CSV or SAF-T format. No additional phases are planned, meaning very small businesses will remain outside the scope of the Bookkeeping Act.
Who is obligated to submit?
All businesses operating in Denmark, including limited liability companies, sole proprietorships, partnerships, and foreign companies with operations in Denmark are obligated to follow the requirements of the Danish Bookkeeping Act. The act targets companies of all sizes but particularly focuses on those with digital bookkeeping systems.
How long is the storage of accounting material and is there a physical signature requirement?
Companies must store accounting records for five years from the end of the financial year to the records and there is no requirement to reproduce physical signatures if the annual report is submitted digitally.
What are the benefits?
The key benefits of the Danish Bookkeeping Act include:
- Improved transparency and compliance with financial regulations.
- Streamlined auditing processes due to more standardized digital bookkeeping.
- Increased security and data integrity by minimizing errors and fraud through the use of digital platforms.
- Enhanced accessibility of financial information, which will lead to more informed business decisions.
How to generate and submit?
To generate and submit bookkeeping records under the new act:
- Businesses need to use approved digital bookkeeping systems that are compatible with the guidelines set by the Danish authorities.
- These systems must allow for the automatic generation of financial records, which can be submitted through secure online platforms.
- Submissions will be done electronically via the Danish Business Authority’s designated portals or via integrated systems, such as e-invoicing solutions that comply with the digital standards specified in the act.
How can SNI help you?
SNI’s add-on solution has customization tables that include information required by the Danish tax authorities. By mapping these customization tables, the solution allows you to process and create e-invoices in the prescribed XML format and collect them in the user-friendly cockpit. SNI add-on solution helps you to stay compliant with the bookkeeping regulations in Denmark.
