Energy taxes and the moms return — what you can deduct

When your business receives an invoice from the electricity company, water utility or gas supplier, the invoice contains more than just the price of the energy itself. It also contains state taxes — and most businesses can get them fully or partially refunded. The six main energy taxes are: elafgift (on electricity), vandafgift (on water and wastewater), gasafgift (on natural gas), olieafgift (on heating oil and fuel), kulafgift (on coal and coke) and CO2-afgift (on fossil fuels). All of these are collected by the state through utility companies, but businesses that use the energy as part of their taxable activity can deduct a large portion. The crucial thing is that the taxes appear separately on the invoice — a 'heat price including taxes' with no breakdown cannot be deducted without separate documentation from the supplier. It's also important to understand that energy tax is not VAT. VAT is deducted through the normal moms return via the input-VAT rubric. Energy tax is deducted in a separate field on the moms return — depending on the tax type. The fields are typically called 'reimbursement of energy taxes' and exist both on the normal moms return and as a separate filing for businesses with large energy-tax volumes.

Elafgift (electricity tax) is by far the largest single deduction for most businesses. The rate is DKK 0.897 per kWh in 2026, and most business types can deduct it fully — except liberal professions (lawyers, accountants, architects, advertising agencies and similar), who may only deduct half. Let's take a concrete example: an SME uses 50,000 kWh of electricity a year. The elafgift on that consumption is 50,000 × 0.897 = DKK 44,850. If the business is fully entitled to deduct (e.g. a manufacturer, shop, restaurant or tradesman), the entire amount can be refunded — nearly DKK 45,000 annually that would otherwise be lost. For a liberal profession with the same consumption, the deduction is half — approximately DKK 22,425, still a significant sum. MomsGate auto-detects elafgift on utility invoices by examining the supplier name (Radius, Andel, Ørsted, Nordlys, EWII, SEAS-NVE, HOFOR Energi and others) and line descriptions. The tax is identified, classified by your industry code and reported separately on the moms return — without you having to review each invoice manually. The central rate is updated annually in MomsGate's configuration, so you always use the correct rate for the period.

Vandafgift (water tax) and wastewater tax are far more restrictive than elafgift. Vandafgiftsloven §9 grants deduction rights only to specific industries: manufacturing businesses, agriculture, food production, laundries, dry cleaners, cleaning services and industrial businesses with high water consumption as part of production. Service industries — offices, shops, consultancies, IT companies, liberal professions — CANNOT deduct vandafgift, even though they obviously pay it like everyone else. The vandafgift rate is approximately DKK 6.37 per m³ in 2026, plus a separate wastewater tax. For a manufacturer with 500 m³ annual water consumption (not unusual for a small production facility, laundry or food-production restaurant), that yields roughly DKK 3,200 in annual deductions — smaller than elafgift but still meaningful. MomsGate automatically checks whether your industry code (CVR-registered NACE code) entitles you to vandafgift deduction. If there's any doubt about your classification, MomsGate flags the transaction for manual approval rather than assuming an incorrect deduction. Errors in vandafgift deductions are among the most common findings in SKAT audits, so it's critical to have documentation in order.

Gasafgift (on natural gas), olieafgift (on heating oil, gas oil, diesel) and kulafgift (on coal, coke and peat) are three separate taxes each with its own rate and deduction rules. Rates vary both by fuel type and from year to year as part of the green transition — e.g. gasafgift is DKK 2.572 per m³ in 2026, olieafgift approximately DKK 2.54 per litre for heating oil, and kulafgift approximately DKK 1,975 per tonne. On top of these comes CO2-afgift, added as an extra tax on fossil fuels. CO2-afgift is typically around 5% of the invoice amount for fossil fuels, but varies significantly by fuel type and changes continually as climate policy tightens. A particularly complex area is district heating (fjernvarme). District-heating companies typically use a mix of fuels — natural gas, biomass, waste incineration, surplus heat — and the mix determines which taxes the customer effectively pays indirectly. Therefore district heating has its own carve-out in the tax rules, and the supplier is required to state the tax share on the invoice. If your supplier doesn't, you cannot deduct — so always verify that your district-heating invoice shows tax amounts separately. MomsGate recognises Denmark's largest district-heating companies and calculates the deduction based on the supplier's stated fuel mix.

Before MomsGate, energy taxes were a time-consuming manual process: the accountant (or a bookkeeper with specialist knowledge) had to review all utility invoices every quarter, identify tax amounts, verify industry eligibility, and manually add them to the moms return. Many businesses simply skipped the process — or at best deducted elafgift but forgot about water, gas and CO2 taxes entirely. MomsGate automates the whole workflow. First, the system auto-classifies invoices based on supplier name: Radius, Andel, Ørsted, EWII, HOFOR, Aarhus Vand, DIN Forsyning, Novafos and others are automatically recognised as energy suppliers, and line descriptions are analysed for tax indications. Next, the system fetches current tax rates from a central configuration, which is updated at each budget settlement in Folketinget. Industry eligibility is automatically checked against your CVR-registered main industry, and if you have mixed activity (see the article on partial VAT deduction), the correct ratio is applied. Finally, energy taxes are reported separately on the moms return — distinct from ordinary input VAT — so SKAT can reconcile the numbers correctly. For a typical Danish SME with 50,000 kWh electricity consumption, some heat consumption and normal water usage, MomsGate finds approximately DKK 40,000 in annual deductions. That alone covers the cost of a MomsGate subscription many times over — in fact, energy taxes are the feature that most often delivers 10x ROI in the first year.