VAT for Hairdressers: Benefits and Common Questions Answered

What is VAT?

VAT is a tax that companies must collect or pay when selling or buying goods or services. In Denmark, a 25% VAT is added to the price of a product. A company must report both sales and purchase VAT.

How do you calculate sales tax?

Let's say you need DKK 2,000 in your coffers for a treatment. In order for you to get it, you must add 25% to the price. In this case, it will therefore be DKK 500 extra. This means that the price of the treatment must cost your customer DKK 2,500 , because you have to pay the DKK 500 in tax.

How do you calculate sales tax?

Purchase VAT must be disclosed, no matter where you shop and therefore must not be calculated. With us, the sales tax is displayed e.g. in the basket and through check-out. If you trade, as a company, abroad, the VAT can be fully deducted [and thus not paid] from by providing your VAT number. Please note that you cannot therefore deduct the purchase VAT from your accounts either.

What does it mean to be liable for VAT as a hairdresser?

As a hairdresser, VAT liability means that you must collect VAT on your services and products. At the same time, you have the right to deduct the VAT from the costs you have had in connection with your business.

What should it be reported for?

If you have earned more [sales tax] than you have spent [purchase VAT], you must pay the excess sales tax for tax. If you have spent more than you have earned, you must get money back from tax.

How do hairdressers take advantage of VAT benefits?

If you have earned a lot of money and therefore have to pay your sales tax, you can e.g. buy new equipment or fixtures . On it you can pay your sales tax and at the same time buy fixtures and equipment that can make your everyday life better.

Advantages of VAT registration

VAT registration allows hairdressers to deduct VAT from purchases, which can be a significant financial advantage. In addition, it contributes to building professionalism and trust with customers.

Is there VAT on all treatments?

VAT on specific treatments depends on the local VAT rules. Some treatments may be VAT-free, especially if they have health purposes. It is essential to consult the specific VAT rules in your region.