The new accounting law came into effect on July 1, 2022, bringing significant changes to IT systems for accounting. Here is an overview of the law and its implications for you.
WHAT DO WE KNOW ABOUT THE ACCOUNTING LAW?
On May 19, 2022, the Danish Parliament passed the bill for a new accounting law (LAW nr. 700 of May 24, 2022). The law came into force on July 1, 2022, replacing the previous accounting law.
The significant changes compared to the previous law are the requirements for digital accounting and accounting systems. It is these requirements that we will delve into in the following.
The requirements are to be implemented over the next 3-4 years
Timeline for digital accounting for businesses:
January 1, 2024: Registered accounting systems are published.
July 1, 2024: Companies required to submit annual reports and using a standard accounting system must digitize their accounting.
January 1, 2025: Companies required to submit annual reports and using a custom accounting system must digitize their accounting.
2026: Personally owned and financial companies must digitize their accounting.
The implementation of the accounting law is outlined in two regulations, both effective as of February 1, 2023. One describes the requirements for digital standard accounting systems (BEK nr. 97 of January 26, 2023), and the other outlines the requirements for how a system provider should register (BEK nr. 98 of January 26, 2023).
Fundamentally, there are three requirements to be met regarding digital accounting.
Requirement 1: Storage
Support continuous registration of company transactions with documentation for each entry and secure storage of records and documents for 5 years.
Requirement 2: Security
Comply with recognized IT security standards, including user and access control, and ensure automatic backup of records and documents.
Requirement 3: Automation
Support the automation of administrative processes, including the automatic sending and receiving of e-invoices and the option for coding in accordance with a public standard chart of accounts in registered accounting systems.
Source: Law no. 700 of May 24, 2022, Section §15
Entities subject to accounting requirements must comply with digital accounting in the financial year starting June 1, 2023, while other entities, such as privately owned and associations, have a slightly longer deadline until 2026. A specific date has not been announced at this time.
DIGITAL ACCOUNTING SYSTEMS
With the new accounting law, two types of accounting systems are introduced: standard accounting systems and custom accounting systems, also known as registered or non-registered systems.
The requirements for standard accounting systems came into effect on February 1, 2023, as described in one of the regulations (BEK nr. 97 of January 26, 2023).
The deadline for registering as a provider of a standard accounting system was October 31, 2023. Interested parties must describe and ensure compliance with the requirements and then submit the registration to the Danish Business Authority. From the submission of registration until the end of the year, the Danish Business Authority will verify the reported accounting systems to ensure compliance. If the accounting systems meet the requirements, they can be included in an approved list of digital standard accounting systems, to be published in early 2024.
A standard accounting system must be registered with the Danish Business Authority before it can be marketed in Denmark. If a system provider misses the October 31, 2023 deadline, it does not mean the end of the road. System providers can continuously submit their standard accounting system for approval.
There are several requirements for standard accounting systems, including:
- Storing transactions and documents for 5 years. They must also ensure that data can be made available in a desired format for authorities within a deadline of 4 weeks.
- Ensuring an audit trail of recorded transactions. Certain information must be saved at a minimum, including date, security regarding access, initials of the person who recorded, etc.
- Supporting backup functionality.
- Implementing appropriate technical and organizational security measures.
- Complying with the requirements of the Data Protection Regulation.
- Automatically sending and receiving e-invoices.
- Reconciling a company’s accounting with its bank account.
- Coding according to a public standard chart of accounts covering financial statements and VAT.
- Recording correctly according to an accounting guide or coding guide.
- Sharing a company’s accounting data.
- Reporting annual financial statements and VAT.
- Supporting notification for registration in the NemHandelsregisteret as registration functionality.
Non-registered accounting systems:
The requirements for users of non-registered accounting systems are expected to take effect on January 1, 2025.
From the consultation material in August 2023, it appears that several requirements coincide with those for standard accounting systems, including requirements for the registration of recorded transactions and logs for both creation and changes, etc.
The requirements for both sending and receiving OIOUBL and Peppol invoices and credit notes, as well as the requirement for sending receipts, are the same for both registered and non-registered systems.
A significant difference between the two system types is that it is the system providers who must ensure that all requirements are met for standard accounting systems. For non-registered accounting systems, it is the responsibility of the companies to ensure compliance, of course, in collaboration with their system provider.
MYSUPPLY CAN HELP
mySupply can act as a third party for standard systems. In that case, it becomes an agreement between standard system providers and mySupply. As a third party, one must meet the same requirements as the main provider of standard accounting systems.
mySupply can also be part of custom accounting systems, where we can address many of the requirements imposed on accounting systems.
- Archive transactions and documents with our archive solution, providing data in desired formats.
- Send and receive invoices, credit notes, and receipts in desired formats.
- Generate receipts directly and automatically based on rules.
- Convert from in-house formats to required formats from authorities.
- Register in the NemHandelsregisteret.
WHAT ABOUT THE NEW ACCOUNTING LAW AND NEMHANDEL?
The Danish Business Authority has announced that an OIOUBL upgrade of invoices and credit notes, as well as the receipt document, to version 3, will be released during 2024. The purpose is to align more closely with EU rules and the Peppol standard. The reason for not adopting the Peppol standard, as seen in Norway and Sweden, is to maintain flexibility in maintaining one’s own standard, as the change processes at the European level can be lengthy and cumbersome.’The Danish Business Authority has announced that an OIOUBL upgrade of invoices and credit notes, as well as the receipt document, to version 3, will be released during 2024. The purpose is to align more closely with EU rules and the Peppol standard. The reason for not adopting the Peppol standard, as seen in Norway and Sweden, is to maintain flexibility in maintaining one’s own standard, as the change processes at the European level can be lengthy and cumbersome.
ACCOUNTING LAW WHAT DO WE KNOW ABOUT NEMHANDEL EDELIVERY?
In May 2023, the Danish Business Authority released a reference implementation, the Danish version of a four-corner model (similar to the Peppol infrastructure). The deadline for supporting the new NemHandel infrastructure “NemHandel eDelivery” was November 1, 2023.
The existing exchange method, OIORASP, will be phased out during 2024.
mySupply handles tasks related to the transition from OIORASP to NemHandel eDelivery in VAX 360, so it is not something our customers need to work on.
WHAT DOCUMENT TYPES ARE COMING?
Requirements are set for accounting systems regarding the exchange of invoices and credit notes; specifically, systems must be able to:
- Send and receive OIOUBL invoices and credit notes.
- Send an application response upon receiving an OIOUBL invoice.
- Send and receive Peppol invoices and credit notes.
- Send a message level response upon receiving a Peppol invoice.
- Send an invoice response upon receiving a Peppol invoice.
It should be noted that during 2024, there will be requirements for updating OIOUBL invoices, credit notes, and application response documents to version 3. This is a major release, meaning that previous versions of OIOUBL cannot be validated with the new rule set.
In OIOUBL 3, there will also be a distinction between two types of receipts (as in Peppol) – a technical and a business-related receipt. A technical receipt (message level response) is generated during shipment and rejects an invoice if it fundamentally does not comply with the rule set. A business-related receipt (invoice response) is an indication of whether the recipient intends to pay the invoice or not. For example, it could be a rejection if the price is incorrect.
Although there is a requirement for accounting systems to send a receipt, it is not immediately a requirement for the invoice recipient to acknowledge the document.
The invoice sender must be registered to receive an application response for technical rejections. However, it is not a requirement for the invoice sender to be registered to receive an application response for business-related rejections.
OIOUBL 3 DOCUMENT PACKAGES
Other OIOUBL documents will also be updated to version 3 so that they will gradually align with Peppol. The following document packages are mentioned by the Danish Business Authority:
- OIOUBL 3 Goods Receipt Confirmation
- OIOUBL 3 Order Package
- OIOUBL 3 Catalog Package
In addition to the above, a new document type “Product Data Sheet” has been announced, aiming to specify product master data. The background is the increased focus on green data, sustainability, circular economy, and the increased requirements for ESG reporting, which will be effective for all major companies in 2024.
MYSUPPLY IS READY
mySupply is always ready to handle your end-to-end electronic document management process. We have the latest knowledge and participate in all major committees, ensuring we are the first to adopt new guidelines.
If you need further information, feel free to contact us.