VAT Reverse Charge: 🇨🇾 Cyprus to 🇩🇰 Denmark

Yes. When a VAT-registered business in Cyprus supplies B2B services to a VAT-registered business in Denmark, the reverse charge mechanism applies under Article 196 of EU VAT Directive 2006/112/EC. The Cyprus supplier invoices at 0% VAT, and the Denmark customer self-accounts for VAT at their local rate of 25%.

If the customer is VAT-registered, put 0% VAT on the invoice. You must include the customer's Denmark VAT number and the note: "VAT reverse charge — Article 196, Directive 2006/112/EC". Do not charge Cyprus VAT (19%) on cross-border B2B service invoices.

The standard VAT rate in Denmark is 25%. When reverse charge applies, the Denmark customer declares 25% VAT in their local VAT return and simultaneously deducts it as input VAT — so the net cash effect is zero for a fully VAT-registered business.

Yes. You must report cross-border B2B services in your EC Sales List (ESL), also known as VIES or Recapitulative Statement. Report these as services (not goods) using the customer's Denmark VAT number. Filing frequency depends on Cyprus's local rules — typically monthly or quarterly.

If the customer in Denmark does not have a VAT number, reverse charge does not apply. For B2C supplies or non-registered businesses, different rules apply. For most services, you would charge Cyprus VAT (19%). For digital/electronically supplied services, Denmark VAT (25%) may apply via the EU One Stop Shop (OSS) scheme.

Verify the customer's VAT number using the EU VIES system at ec.europa.eu/taxation_customs/vies before issuing a zero-rated invoice. Denmark VAT numbers start with the prefix "DK". Keep a record of the VIES confirmation for your audit trail.

Reverse charge under Article 196 applies to most B2B services where the place of supply is the customer's country. Some services have special rules — for example, services related to immovable property are taxed where the property is located, and short-term vehicle hire has specific rules. For standard professional, consulting, digital, and software services between Cyprus and Denmark, reverse charge applies.

Your invoice must include: (1) Your Cyprus VAT number, (2) The customer's Denmark VAT number, (3) 0% VAT / VAT amount: 0.00, and (4) The legal reference: "Reverse charge — Article 196, Council Directive 2006/112/EC". Some suppliers also add the Denmark equivalent note in the local language.