Denmark has taken a significant step towards increasing digitalization in companies and tackling tax fraud with the passing of a new bookkeeping act in May 2022. This act, which aims to modernize the country’s financial reporting system, mandates companies to maintain digital records and provide a detailed description of their bookkeeping process.
The new digital bookkeeping system includes several provisions to ensure the integrity and security of financial data. One of the key aspects is the registration of transactions, which will enable authorities to track financial activities more effectively. Additionally, companies will be required to implement safe storage practices to protect sensitive information from unauthorized access.
Cybersecurity measures are also a crucial part of the new system. With the increasing prevalence of cyber threats, it is essential for companies to safeguard their financial data from potential breaches. The new bookkeeping act emphasizes the importance of implementing robust cybersecurity measures to prevent unauthorized access and data manipulation.
Furthermore, the act aims to streamline administrative processes by promoting automation. By leveraging technology, companies can reduce the burden of manual tasks and improve efficiency. Automation of administrative processes will not only save time but also minimize the risk of human errors in financial reporting.
The implementation timeline for the new digital bookkeeping system is set for February 2023. From that point onwards, it will be mandatory for companies liable for accounting under the Annual Accounts Act to adopt the new system. This move is expected to have a significant impact on businesses across the country, as it will revolutionize how financial records are maintained and reported.
The Danish Business Authority (ERST) will play a crucial role in the implementation process. It will be responsible for the registration of companies that wish to become PEPPOL access points or service metadata publishers. PEPPOL, which stands for Pan-European Public Procurement Online, is an international network that facilitates electronic data interchange between businesses and public authorities.
The NemHandel portal, operated by the Danish Business Authority, will also play a vital role in the new digital bookkeeping system. This national service enables companies to submit secure electronic invoices over the internet. By leveraging the NemHandel portal, businesses can simplify their invoicing process and ensure compliance with the new bookkeeping requirements.
The introduction of the new bookkeeping act reflects Denmark’s commitment to embracing digitalization and leveraging technology to improve financial reporting. By mandating digital records and promoting automation, the government aims to enhance transparency, efficiency, and accuracy in financial reporting.
This move is not only expected to benefit the Danish economy but also contribute to the global fight against tax fraud. By implementing a robust digital bookkeeping system, Denmark aims to reduce the opportunities for fraudulent activities and ensure that companies fulfill their tax obligations.
Overall, the passing of the new bookkeeping act in Denmark marks a significant milestone in the country’s journey towards a more digitalized and efficient financial reporting system. With the implementation set for February 2023, companies need to prepare themselves for the transition and embrace the opportunities that digitalization brings.
