The Danish government wants every company in the country to pay VAT within 20 days, under a proposal included in its bill for the 2027 budget. The plan would replace today’s tiered system, in which the deadline depends on a firm’s annual revenue, and the government expects it to bring in 500 million kroner by 2030. The change would apply regardless of how much a company sells in a year.
Under the current rules, small businesses have much longer to settle. Companies with annual revenue below 5 million kroner file VAT returns twice a year and have 60 days to pay. Those with revenue between 5 million and 50 million kroner file quarterly, also with a 60-day payment deadline. Only the largest firms, with revenue above 50 million kroner, file monthly and must pay within 25 days. The proposal would apply the same 20-day limit to all of them, whatever their size.
The 500 million kroner revenue estimate is calculated after allowing for refunds and for changes in how businesses behave once the new deadlines apply. In practice, the biggest change would fall on the small and medium-sized companies that currently enjoy the 60-day window, since their deadline would be cut by two thirds while the largest firms would lose only five days. A firm on the semi-annual cycle, for example, would see its payment window shrink from 60 days to 20.
SMVdanmark, which represents small and medium-sized enterprises, has come out strongly against the plan. Chief executive Jakob Brandt called it a “reverse Robin Hood” measure that takes from small companies to benefit large ones, and said he hopes politicians will “weed out this thistle” during the coming budget talks. The organisation warns that a shorter deadline could force businesses to hand over VAT before their own customers have paid them, putting pressure on cash flow.
The group also argues that tax policy already leans heavily on large firms for revenue. It says the 1,000 companies paying the most corporate tax account for more than 70 per cent of corporate tax receipts, while many smaller businesses, including sole proprietorships and loss-making start-ups, pay no corporate income tax at all. SMVdanmark is urging the government to exempt the smallest businesses from the VAT change and to rethink planned cuts to business subsidies. The proposal will now be part of negotiations on the 2027 budget.
