Denmark: The Status of Electronic Invoicing and the Bookkeeping Act (SAF-T)

Electronic invoicing is widely adopted in Denmark, although it is not yet mandatory for business-to-business (B2B) transactions. However, regulations and standards encourage its use, particularly in the public sector and among business accounting systems.

Electronic Invoicing in Denmark

B2G Sector (Business to Government)

In the B2G sector, electronic invoicing has been mandatory for all transactions with government entities since 2005. The most commonly used formats are PEPPOL BIS Billing 3.0 and the national Danish format OIOUBL.

Denmark has announced OIOUBL 3, the latest version of its electronic invoicing format. On November 21, 2024, NemHandel introduced the OIOUBL 3 Invoice Package, which includes key updates:

• Mandatory invoice message responses.
• Alignment with the European standard EN 16931.
• A migration plan for transitioning from OIOUBL 2.1 to OIOUBL 3.

The package includes specifications for invoices, credit notes, and invoice responses, along with technical definitions and key implementation dates.

B2B Sector (Business to Business)

Although electronic invoicing is not yet mandatory for B2B transactions, it is widely used. The most commonly used formats are PEPPOL BIS Billing 3.0 and the Danish national format OIOUBL.

The Danish Bookkeeping Act requires all standard and specialized bookkeeping systems to support the sending and receiving of electronic invoices.

The Danish government has shown interest in further promoting e-invoicing in the private sector, which means additional requirements or mandatory deadlines may be introduced in the future.

Denmark’s Electronic Invoicing Model

Unlike other countries that have implemented centralized state platforms, Denmark allows businesses to freely choose private providers for generating and sending electronic invoices.

E-invoicing technology providers maintain and update a public database with the necessary information for sending and receiving invoices, both for public and private entities that have enabled this option.
This flexible approach has encouraged widespread adoption while ensuring interoperability within the European Union and with international business partners.

Danish Bookkeeping Act

Under legislation passed in 2022, companies based in Denmark must register and archive their bookkeeping records in approved accounting or ERP systems. They are also required to send and receive structured electronic invoices. The Danish Bookkeeping Act aims to strengthen efforts against tax fraud and increase the digitalization of Danish companies’ accounting.

Since 2023, major accounting and ERP software providers have been required to certify their solutions with the Danish Business Authority.
The requirement for digital bookkeeping includes two fundamental obligations:

1. Recording business transactions in a digital accounting system.
2. Archiving records and supporting documentation in a digital bookkeeping system or, at a minimum, maintaining a full backup on a secure server with a provider or third party.

Implementation Timeline

The Danish Bookkeeping Act mandates that digital accounting systems comply with new requirements, which are being implemented gradually. This phased approach allows companies and bookkeeping software providers to adapt efficiently to more automated and standardized systems.

From 2025 and 2026, companies must prepare to comply with new digital bookkeeping regulations:

• January 1, 2025: Companies without certified bookkeeping systems must:
  • Maintain accounting records in digital format.
  • Be able to issue and receive structured electronic invoices.
  • Generate data in SAF-T format upon request by the tax authority.
• No earlier than July 1, 2026: The requirement will extend to non-accounting companies with a net turnover exceeding 300,000 DKK in the two previous fiscal years, if they use an unregistered accounting system.

This requirement does not impose a mandatory periodic filing but serves as an on-demand obligation. Companies must be able to generate and submit the file whenever requested by tax authorities during audits or inspections.

What Does the Danish Bookkeeping Act Require?

One of the most significant changes introduced by this law is the requirement to digitize bookkeeping. In addition, companies must use a government-approved digital bookkeeping system and must meet a number of requirements defined by the Danish government through an executive order. The Danish government is expected to provide further details soon so that digital solution providers can certify their systems accordingly.

According to Article 15, three general or basic requirements apply to digital bookkeeping systems, regardless of whether they are standard or custom-built:

1. The system must support continuous transaction recording with specification annex documentation for each record and reliable archive of records and attachments for five years.
2. The system must comply with recognized IT security standards, including user and access management, as well as ensuring automatic backup of records and attachments.
3. The system must support the automation of administrative processes, including automatic sending and receiving of electronic invoices and the ability to manage bookkeeping according to a public standard chart of accounts in registered accounting systems.

SAF-T Structure in Denmark

The SAF-T file in Denmark consists of 19 ledgers, which include detailed information on the company's financial transactions and registered bookkeeping records. These may include, among others:

• General Ledger
• Accounts Receivable
• Accounts Payable
• VAT Records
• Electronic Invoicing Records
• Fixed Asset Register
• Bank Accounts and Reconciliations

Compliance with these deadlines is essential to avoid penalties and ensure integration with Denmark’s electronic invoicing and digital audit standards.