e-Invoicing in Denmark: Timeline, Guidelines, Process, and Steps for Implementation
Denmark has been at the forefront of using eInvoicing, and it's mandatory for business-to-government (B2G) since 2005. Following that, the Bookkeeping Act of 2022 has also made business-to-business (B2B) eInvoicing mandatory in a phased approach. Medium and large enterprises are already included under it, and the smaller enterprises need to implement e-Invoicing by January 1, 2026.
Governed by the Danish Business Authority, the system utilizes platforms such as NemHandel and the Peppol network, utilizing formats such as Peppol BIS 3.0 and OIOUBL, aligning with the European standards (EN 16931). The following guide provides a brief overview of the eInvoicing timeline, guidelines, process, and steps for implementing e-Invoicing in Denmark to make businesses compliant and efficient.
What is e-Invoicing in Denmark?
Denmark has been at the forefront of eInvoicing since 2005, making it mandatory for public institutions and authorities for B2G transactions. Moving forward with introducing the Bookkeeping Act, we covered B2B transactions with a phased-out approach.
Currently, the NemHandle platform is used to exchange B2G transactions. As per the Bookkeeping Act, B2B invoices must be transmitted through the NemHandle platform or PEPPOL network, following formats like Peppol BIS 3.0 and OIOUBL, both compliant with the European standard (EN-16931). No e-sign is mandatory as of now. eInvoices will be archived for 5-10 years, depending on the asset class.
e-Invoice Implementation Timeline
Denmark follows a phased-out approach for the implementation of e-invoicing. Here is a brief overview:
Year | Threshold Requirement |
2005 | e-Invoicing start date. It is mandatory for all public institutions & authorities for B2G transactions. |
Then, the adoption of the Bookkeeping Act of 2022 mandated digital bookkeeping for businesses, including Denmark e-Invoicing. Here are the phases in which this will be implemented:
Year | Threshold Requirement |
January 2024 | Companies filing annual reports to the government’s bookkeeping system- ERST (Class B, C, D) |
July 2024 | Companies using in-house bookkeeping software (Class B, C, D) |
January 2026 | Small companies which are not obliged to send annual reports with turnover > 300,000 DKK for two consecutive years (Class A) |
July 2026 | Small companies using in-house bookkeeping software (Class A) |
e-Invoicing Process in Denmark
Denmark uses the NemHandel network to send and receive electronic invoices. The NemHandel network operates on the four-corner model, similar to the PEPPOL network, which allows Danish businesses to trade electronically across Europe. Here are the e-Invoice guidelines:
- Registration: Sign up on the NemHandel platform and connect your accounting system to an access point.
- Prepare Your Invoice: Ensure the recipient is registered in the NemHandelRegistry (NHR) and obtain their e-invoice recipient number (GLN/EAN).
- Choose Your Submission Method: You can use:
- Fully integrated e-invoice-enabled ERP solutions
- ERP solutions combined with open-source software from the Danish Business Authority
- A self-service web-based invoicing portal
- Select an Access Point Provider: The provider ensures your invoice meets mandatory standards and delivers it to the recipient’s access point.
- Transmission: The invoice is sent through your access point provider to the recipient’s access point.
Characteristics of an e-Invoice in Denmark
Denmark has specific requirements for electronic invoicing. Here’s what you need to know:
- Format: Supports only PEPPOL BIS and OIOUBL formats. OIOUBL (Offentlig Information Online - Universal Business Language) is an XML document that follows the UBL 2.0 standard and is intended for public and private sector business transactions.
- Updated Format: Version 3.0 of the OIOUBL format, under EN 16931, was published in November 2024 and will be compulsory from November 2025.
- e-signature: Not needed.
- Archival: 5 years for movable property, 10 years for immovable property.
- PEPPOL Network: Interoperable with NemHandel for cross-border trade.
Who Needs to Comply with e-Invoicing in Denmark?
In Denmark, e-invoicing compliance applies to both private companies and public institutions.
- All public institutions and authorities.
- All businesses are subjected to bookkeeping, regardless of their ownership or liability structure.
- Companies that are required to submit an annual report to the Danish Business Authority (ERST).
- Associations with commercial operations and organizations are liable to pay taxes in Denmark.
- Companies receiving public subsidies.
- Other companies that do not need to produce an annual report but whose two-yearly turnovers have reached more than DKK 300,000.
Benefits of e-Invoicing in Denmark
e-invoicing in Denmark simplifies financial transactions and improves compliance.
- Cost Efficiency: Reduces the use of paper and manual handling, time, and expense.
- Accuracy: Reduces mistakes with automated data entry and data validation.
- Compliance: Facilitates legal requirement compliance with standardization of format.
- Faster Payments: Reduces payment and processing times.
- Cross-Border Compatibility: Easily integrates with the PEPPOL network for cross-border operations.
How can ClearTax help a business with e-Invoicing in Denmark?
ClearTax, a trusted e-invoicing solution provider, keeps businesses in line with Denmark's e-invoicing regulations by:
- Seamless ERP & POS Integration: Automated invoice generation and transfers to NemHandel or PEPPOL.
- Real-Time Compliance Verifications: Verifies invoices against Danish regulations, such as PEPPOL BIS 3.0 and OIOUBL formats.
- Cloud-Based e-Invoicing Portal: Facilitates easy monitoring, reconciliation, and management of e-invoices.
- Automated Reporting & Compliance Alerts: Prevents delayed or inaccurate filings and associated fines by keeping companies updated.
Conclusion
Denmark has been a leader in e-invoicing, with mandatory adoption for business-to-government (B2G) transactions since 2005. The Bookkeeping Act of 2022 extended this requirement to business-to-business (B2B) transactions with a phased implementation. By 2026, all businesses, including small enterprises, must comply with e-invoicing requirements using the NemHandel and PEPPOL networks. The process includes registration, preparation, submission, and transmission of invoices in formats like PEPPOL BIS 3.0 and OIOUBL, which are standardized for cross-border operations. This system offers numerous benefits, such as cost efficiency, improved accuracy, faster payments, and enhanced compliance. ClearTax helps businesses streamline this process by integrating e-invoicing into their ERP systems, ensuring real-time compliance, and providing cloud-based solutions for monitoring and reporting.