Accounting for Danish Sole Proprietorships: Bookkeeping, VAT and Tax (2026)

Accounting for a Danish sole proprietorship (enkeltmandsvirksomhed) is simpler than for a limited company — but it still has to be right. You must keep your books continuously, report VAT on time and declare the business result on your personal tax return. This guide covers what a self-employed tradesperson in Denmark needs to have under control: bookkeeping, VAT, tax and the classic pitfalls.

What does a sole proprietorship need to handle?

As a sole proprietorship in Denmark you must: (1) record all income and expenses continuously with receipts, (2) report and pay VAT if your turnover exceeds DKK 50,000 over 12 months, (3) pay B-tax in instalments through the year based on your preliminary income assessment, and (4) declare the business result on your annual tax return. A sole proprietorship does not file annual reports with the Danish Business Authority — that requirement only applies to companies such as ApS and A/S.

Bookkeeping: continuous and digital

The Danish Bookkeeping Act requires you to record all transactions continuously and keep the documentation for 5 years. Most businesses are also covered by the digital bookkeeping requirement: entries and receipts must be recorded and stored in a digital bookkeeping system.

In practice, for a trades business, that means:

• Photograph the receipt the moment you buy materials
• Record income when the invoice is sent, not when the money arrives
• Reconcile the bank account regularly
• Keep business and private finances separate with a dedicated business account

VAT: registration, rate and deadlines

You must register for VAT once your taxable turnover exceeds DKK 50,000 within 12 months — as a tradesperson you hit that ceiling almost immediately, so register from day one. The Danish VAT rate is 25% on virtually all trades work. Smaller businesses settle VAT half-yearly; larger ones quarterly. What you pay is the difference between the VAT on your invoices and the VAT on your purchases.

Read more in our guide: VAT for tradespeople in Denmark.

Tax: B-tax and your annual return

A sole proprietorship is not a separate tax entity — the profit is taxed as your personal income. You estimate the expected profit on your preliminary assessment (forskudsopgørelse), pay B-tax in instalments through the year, and declare the actual result after year-end. A good rule of thumb: set aside 30–40% of profit for tax and labour-market contributions. If you have significant interest costs or want to retain profit in the business, ask an accountant about the Danish business taxation scheme (virksomhedsordningen).

Do I need an accountant?

There is no legal requirement — but most self-employed tradespeople come out ahead by outsourcing bookkeeping, VAT and year-end work. Desk hours are hours you don't invoice, and mistakes in VAT or deductions typically cost more than the accountant's fee.

The 5 most common mistakes

• Mixing private and business money in one account
• Missing receipts — no receipt, no deduction and no VAT recovery
• Late VAT reporting — fees and estimated assessments that are almost always set too high
• No money set aside for tax — profit is not take-home pay
• Forgotten deductions — mileage, tools, phone and software; see our guide to tax deductions for tradespeople

FAQ

Does a sole proprietorship file an annual report?

Not with the Danish Business Authority — that applies to companies (ApS, A/S). You must still keep books under the Bookkeeping Act and declare the result to the Danish Tax Agency on your annual return.

What does an accountant cost for a sole proprietorship?

It depends on the number of receipts and how much clean-up is needed. Ongoing bookkeeping and VAT are typically a fixed monthly fee, with year-end work as a one-off task. See indicative price examples at Revisor Svend.

When do I have to register for VAT?

When your taxable turnover exceeds DKK 50,000 within a 12-month period. Voluntary registration before that is allowed — and lets you recover VAT on your purchases.

Good accounting starts with good habits: a separate business account, receipts photographed the same day, VAT reported on time. The rest is best handed to Revisor Svend — so your hours go where they're billable.