The New Danish Bookkeeping Act

Keeping up with the legislation in regard to bookkeeping and administration in Denmark is difficult for many business owners – in and outside Denmark. And the latest changes to the Danish Bookkeeping Act might have a big impact on your current setup. Note that the deadlines that are approaching quickly – so keep reading! 

So, the main question is: Does your Enterprise Resource Planning (ERP) system comply with the requirements for digital bookkeeping systems in Denmark introduced in the new Danish bookkeeping act that came into force on 1 February 2023?  

Important deadlines👉

1 January 2024: The list of approved bookkeeping systems is announced. 

1 July 2024: Digital bookkeeping must be implemented for companies that are required to submit their annual report and are using a standard bookkeeping system. Note that this deadline depends on when your financial year starts. 

1 January 2025: Digital bookkeeping must be implemented for companies that are required to submit their annual report and are using a specially developed bookkeeping system. 

2026: Personally owned and financial businesses must do their bookkeeping digitally.

The Danish Bookkeeping Act

The bill was adopted in May 2022 with the purpose of promoting digitalization in bookkeeping and enabling more streamlined processes when reporting to the Danish Business Authorities. Here, the most notable and essential rule in the new Danish Bookkeeping Act is that you must implement a digital bookkeeping system 

Many concerned provisions entered into force in July 2022. However, the provisions regarding digitalization in bookkeeping entered into force in February 2023, and must for most parts be implemented this year.  

And don’t worry, it’s not all bad! With compliant digital bookkeeping, it is easier to comply with and adapt to new regulations, it can increase efficiency and limit time spent on manual administrative work. And moreover, it suggested that your security level will increase and be more protected against cybercrime.  

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Requirements for digital bookkeeping systems

Before an ERP system can be marketed (and therefore used) in Denmark it needs to be approved by the Danish Business Authority

So, if you are using a specially made system, a system not on the Danish Business Authorities’ list, or if you are using an in-house built system, you need to ensure that your system meets the requirements set by the Danish Business Authority for the bookkeeping of your company or your Danish branch.
The same thing applies if you are using third-party apps in addition to an approved system to a degree where the third-party app must be considered an integrated part of the bookkeeping system. An example of this could be seperate order or invoicing apps, where invoicing details are stored and are not transferred to the bookkeeping system.  

The three main criteria are:  

The system must support a continuous registration of the company’s transactions with supporting documents for each registration and safe storage of registrations and supporting documents for five years. 

The system must have appropriate technical and organizational IT security measures. These must constantly ensure that the system has a high level of IT security in relation to the functions that a digital standard bookkeeping system must support. This could be user and access management as well as automatic backups of registrations and attachments. 

The system must support automation of administrative processes. Examples include automatic sending and receipt of e-invoices and allowing accounting in accordance with a public standard chart of accounts in registered accounting systems. 

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Consequences of non-compliance

If your bookkeeping system does not meet the requirements of the Danish Business Authority your branch can receive a fine. So make sure to check with your applied bookkeeping system! This is important regardless of whether this is an in-house developed system, a foreign developed system, or simply is not on the Danish Business Authority’s list of registered bookkeeping systems. 

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At mighty admins, we can assist you with:  
Bookkeeping, reporting, and reconciliation of your Danish Branch or company.
Preparing an annual wheel of filing and payment deadlines with the local authorities.
Handling your Corporate Administration from A-Z, so you never have to think about important filing and payment deadlines. 

mighty admins also offers a registered address (domiciliation) to clients at favorable prices with up to a 25% discount compared to other providers in the market.

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