What is a VAT calculation?
A VAT return is a calculation of how much VAT you need to report to the Tax Authority according to the applicable VAT deadlines. The return comprises two elements: input VAT and output VAT.
- Input VAT:The VAT you must pay on your purchases, which you can claim back from the Tax Authority.
- Output VAT: The VAT you have collected from your customers, which must be paid back to the Tax Authority.
You can handle business expenses automatically with Acubiz
With Acubiz, you can automate your expense management in your company and keep track of all necessary receipts, so you can quickly make your VAT calculation and VAT accounts.
How to do it
To prepare a VAT return, you need to account for both output and input VAT. Subtract the input VAT from the output VAT to determine whether you need to pay or receive VAT.
If the return shows that your output VAT is greater than your input VAT, you need to pay the difference back. Conversely, if your input VAT is greater, you will receive money back.
Who needs to make a VAT calculation?
All VAT-registered companies must report VAT to the Danish Tax Agency as a VAT return.
A company must be VAT-registered if its annual turnover exceeds 50,000 Danish kroner. Otherwise, it is optional whether you want to register for VAT.
Companies such as doctors and banks, which sell VAT-free goods or services, are exempt from VAT and pay a payroll tax instead. Therefore, they do not have to make a VAT calculation.
The higher the turnover, the shorter the deadline for VAT reporting
Your company’s turnover determines how often you must prepare a VAT calculation and report VAT: monthly, quarterly, or semi-annually. The higher the turnover, the shorter the deadline for reporting.
If your company has not had any purchases or sales during the period, you must make a so-called zero reporting. By reporting 0 kroner in VAT, you avoid paying the Danish Tax Agency a fee for missing reporting.
What if there are errors in my VAT return?
You or your bookkeeper must check the VAT calculation for errors and omissions. But if you miscalculate the VAT, you can correct it in a subsequent declaration to the Danish Tax Agency.
If you have to pay VAT, you must remember to do so when the subsequent declaration is complete. If, on the other hand, you have VAT to claim, the money is automatically transferred to your bank account.
You should contact the Danish Tax Agency as soon as possible if there are significant errors.
Do you want to know more?
Is your company VAT registered, and do you have much travel activity connected with your work? Then you can apply for VAT refunds and get the VAT back for travel expenses abroad.
At Acubiz, we can handle the complicated application process, so you don’t have to spend time on it. We help you get your money back and take care of everything.
Contact us if you want to know how we can help your business or book a free online demo to learn more.