Residents pay income tax on worldwide income, and non-residents on income from sources in Denmark.
Income of individuals is taxed at the level of the country, municipalities, tax to maintain employment, church tax (for members of the Danish Lutheran Church).
The tax rates are:
Country-level income tax:
Income tax at the country level: 12.01% to 15%.
Municipal tax at an average rate of about 25%.
Tax to maintain employment at a rate of 8%.
Tax on dividend income and gains from the sale of shares is charged at a rate of 27% on income up to DKK 67 500 and 42% on income above this threshold.
There are special tax regimes, particularly for foreign workers and scientists.
Danish companies pay income tax on worldwide income, but profits of foreign permanent establishments and income from overseas property are not subject to income tax in Denmark.
Non-resident companies pay income tax on income from sources in Denmark.
Income tax is paid at a rate of 22%. In some industries other rates apply.
Capital gains are included in the total tax base.
Profits from the sale of shares and dividends are not taxed under certain conditions. For example, profit tax is not paid if the share of participation in a foreign company is at least 10%, such foreign company pays profit tax in its country of residence, and there is an agreement on exchange of tax information with that country.
Social contributions are not set as a percentage of labor remuneration, but as a certain amount in crowns.
The basic contributions include:
From the employee: Pension contribution (ATP) of about EUR 150 per year.
From the employer:
Employers also pay some other fees.
VAT is levied at a rate of 25%.
There are non-taxable supplies.
In general, the withholding tax rate on dividends is 22%, in some cases 15% (27% is withheld and the difference can be refunded).
The 22% tax is withheld when interest is paid. However (with some exceptions) tax may not apply if the creditor is in the EU or in a country with a double taxation treaty with Denmark.
With regard to royalties tax is withheld at a rate of 22%.
Tax may be withheld on certain other payments of income.
Withholding tax may be reduced by double taxation treaty or EU directives.
The Danish property tax system has recently been revised, so all property taxes for 2022 and beyond are preliminary and any adjustment will be required after the final assessment. The final setting of property taxes depends on the publication of final assessments, which is currently expected in 2025/26.
Stamp duty is charged on certain documents (including deeds of transfer of real estate, mortgages related to real estate and cooperative housing, movable property and intangible assets, and property liens on vehicles). Stamp duty is not charged on the transfer of shares.
Stamp duty is a fixed amount of DKK 1,825 to DKK 1,850 accompanied by a predetermined interest based on the fixed fee.
The inheritance tax rate is 15% for immediate relatives and an additional tax is levied on inheritances by more distant relatives. A surviving spouse is not taxed. There is a nontaxable minimum.
Gifts minus the nontaxable threshold are taxed at a 15% rate for gifts between immediate relatives and a higher rate for gifts to certain other relatives. Gifts between non-relatives are subject to income tax.
A foreign company is considered to be a controlled company if:
the Danish company directly or indirectly, alone or jointly with related parties, owns more than 50% of the capital or voting rights in the company, more than half of the company's taxable income is represented by income such as interest, royalties, capital gains, etc.,more than 10% of the company's assets are assets generating these types of income.
CFC rules are in the process of revision.
Denmark has concluded 77 Double Tax Treaties (DTT) with the following jurisdictions:
77 DTTs: Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Brazil, Bulgaria, Canada, Chile, China, Croatia, Cyprus, Czech Republic, Egypt, Estonia, Faroe Islands, Finland, France, Georgia, Germany, Ghana, Greece, Greenland, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Kuwait, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Montenegro, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, United States, Venezuela, Vietnam, Zambia.
Denmark signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The Multilateral Convention entered into force for Denmark on January 1, 2020.
On October 29, 2014, Denmark signed the Multilateral Competent Authorities Agreement on Automatic Exchange of Financial Account Information under the Common Reporting Standard (CRS MCAA), under which Denmark receives information from its financial institutions and automatically exchanges this information with other jurisdictions on an annual basis. The automatic exchange began in September 2017.
In addition, on November 15, 2024, Denmark signed the Multilateral Agreement of Competent Authorities for the Automatic Exchange of Information under the Cryptoasset Reporting Framework (CARF-MCAA), which provides for the reporting of tax information on cryptoasset transactions on a standardized basis for the automatic exchange of such information.
In Denmark, there are no currency controls.
