Danish Taxation: A Guide for Foreign Investors (2025)

Key Aspects of Danish Taxation:

• Corporate Income Tax (Selskabsskat):
  • The standard corporate income tax rate remains competitive. Please verify the current rate with the Danish Tax Agency (Skattestyrelsen), as it is subject to change.
  • Denmark offers a favorable regime for holding companies and certain types of investment activities.
• Individual Income Tax (Indkomstskat):
  • Denmark has a progressive individual income tax system, with national and municipal taxes.
  • Foreign nationals working in Denmark may be eligible for special tax schemes, such as the "expert tax scheme," which offers a reduced tax rate for a limited period.
• Value Added Tax (Moms):
  • The standard VAT rate is 25%.
  • Certain goods and services are exempt or subject to reduced rates.
  • Businesses must register for VAT if their taxable turnover exceeds a certain threshold.
• Withholding Taxes (Kildeskat):
  • Denmark applies withholding taxes on dividends, interest, and royalties paid to non-residents.
  • Double taxation treaties may reduce or eliminate withholding taxes.
• Property Tax (Ejendomsskat):
  • Property owners pay property taxes, which vary depending on the location and type of property.
• Energy Taxes and Environmental Taxes:
  • Denmark has a strong focus on sustainability, and businesses may be subject to various energy and environmental taxes.
  • However, there are also incentives for investing in green technologies and renewable energy.

Key Advantages for Foreign Investors:

• Stable and Transparent System: Denmark has a predictable and transparent tax environment.
• Extensive Double Taxation Treaties: Denmark has a wide network of double taxation treaties, which helps to avoid double taxation.
• Efficient Tax Administration: The Danish Tax Agency (Skattestyrelsen) is known for its efficiency and helpfulness.
• Favorable Business Environment: Denmark offers a business-friendly environment with a skilled workforce and excellent infrastructure.
• Digitalization: The danish tax system is highly digitalized, making it very effective.

Important Considerations for Foreign Investors:

• Tax Residency: Understanding your tax residency status is crucial.
• Double Taxation Treaties: Familiarize yourself with the relevant double taxation treaty between Denmark and your home country.
• Transfer Pricing: Denmark follows OECD transfer pricing guidelines.
• Tax Planning: Seek professional tax advice to optimize your tax position.
• Documentation: Maintain accurate and complete records of all financial transactions.
• Compliance: Ensure compliance with all Danish tax laws and regulations.

Where to Find More Information:

• Danish Tax Agency (Skattestyrelsen): This is the primary source for official tax information.
• Ministry of Taxation (Skatteministeriet): Responsible for tax policy and legislation.
• Invest in Denmark: Provides information on investment opportunities and business regulations.
• Reputable accounting and legal firms: Firms specializing in Danish tax law can provide expert guidance.

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