Digital Bookkeeping becomes mandatory in Denmark from January 1, 2026
What’s changing for Danish businesses and associations?
Starting from January 1st, 2026, a new executive order from the Danish Minister of Business and Industry will enforce mandatory digital bookkeeping for a wide range of businesses and associations. This initiative follows the 2022 Accounting Act and aims to strengthen transparency and compliance across Danish financial operations.
Who must comply with the new digital accounting requirements?
From 2026, the following entities are required to adopt digital bookkeeping systems:
- Personally owned businesses with an annual turnover exceeding DKK 300,000 for two consecutive years.
- Associations with commercial turnover over DKK 300,000 annually for two consecutive years.
- Subsidiaries of financial and insurance companies, as well as ATP-affiliated organisations, which are mandated to file annual accounts, even if they currently use a group-linked accounting system and have been previously exempt.
These requirements ensure all relevant entities are digitally integrated for financial documentation and tax reporting.
Why is Denmark enforcing digital accounting now?
This move toward digitalisation is part of Denmark's broader strategy to:
- Enhance accuracy and traceability in financial reporting.
- Improve efficiency and oversight by regulatory bodies.
- Align with modern accounting standards and EU directives.
The executive order also triggered updates to several related executive orders, ensuring that all digital accounting mandates are harmonised across sectors.
How can companies prepare for compliance?
To meet the January 2026 deadline, businesses and associations should:
- Assess current bookkeeping systems and identify any gaps in digital readiness.
- Select a certified digital accounting platform that meets Danish Business Authority standards.
- Train staff on digital recordkeeping and reporting procedures or hire a partner like Baltic Assist.
- Establish internal controls to ensure two-year revenue tracking for compliance.
Early adoption ensures smoother transitions and reduces the risk of non-compliance penalties.
What happens if a business fails to comply?
Failure to adopt an approved digital bookkeeping system could lead to:
- Administrative sanctions or fines.
- Compliance audits by the Danish Business Authority.
- Delays or rejections in annual financial reporting.
Ensuring timely compliance helps maintain business credibility and operational continuity.
How will digital accounting improve business operations?
Digital accounting is not just a regulatory obligation, it’s a strategic asset.
Benefits include:
- Real-time financial insights for smarter decision-making.
- Simplified reporting to tax and government authorities.
- Reduced risk of manual errors and lost documentation.
- Enhanced scalability for growing enterprises.
This shift empowers businesses to operate with greater transparency and agility.
Frequently Asked Questions (FAQ)
Q1: How do I know if my business crosses the DKK 300,000 threshold?
A: Track your annual net revenue for two consecutive years. If your business exceeds DKK 300,000 each year, digital accounting becomes mandatory.
Q2: What qualifies as a commercial turnover for associations?
A: Income from business activities (e.g., sales, services) qualifies as commercial turnover.
Q3: Are there certified digital bookkeeping systems recommended by the government?
A: Yes, the Danish Business Authority provides a list of approved digital accounting systems that comply with the new regulations.
Q4: Will sole proprietors with seasonal revenue spikes be affected?
A: Only if your annual revenue exceeds DKK 300,000 for two straight years. One-off spikes don’t trigger mandatory compliance.
Q5: What if I already use cloud-based accounting software?
A: Check that your current software meets the Danish Authority's compliance standards. Not all cloud systems are automatically approved.
Q6: Do subsidiaries still need to comply if they report under a group system?
A: Yes, previously exempt subsidiaries must now comply individually if they meet the criteria.
Have a question?
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