What is the CTC model?
Continuous transaction controls describes system consisting of electronic submission of transaction controls, in which data from the taxpayer's system to a platform designated by the tax administration takes place just before, during or immediately after the actual exchange of such data between the parties to the underlying transaction.
How does digitizing invoicing look?
Automating the process means that businesses will have to use an approved digital accounting system and all invoices must go through a central receiving portal. A digital accounting system that is offered or used for accounting must meet the following requirements:
- Include support for continuous registration of the company's transactions with the indication of vouchers at each registration and safe storage of registrations and vouchers for five years.
- Meet recognized IT security standards, including user and access management, and provide automatic backups of registrations and documents.
- Support for the automation of administrative processes, including automatic sending and receiving of e-invoices and the possibility of posting in accordance with the public standard chart of accounts in registered accounting systems.
What does the schedule look like?
From January 2024 at the earliest, there will be a requirement for companies to use an approved system. This requirement will also apply to personally owned companies no earlier than January 2026.
What remains unclear?
After consultation with the customs and tax administration, the Danish Economic Office will define more detailed rules regarding the requirements for digital accounting systems, including specific rules for specific accounting systems, companies and industries. This is expected to happen in early 2023.
In which territory will the changes apply?
The Act does not apply to the Faroe Islands and Greenland, but may be implemented by Royal Decree for Greenland with the changes required by Greenlandic conditions. The law can also be enforced at different times.