Denmark taxes residents on worldwide income and non-residents on Denmark-source income only. Denmark operates a largely pre-filled administrative assessment system: Skattestyrelsen pre-populates most individual tax returns using third-party data (employers, banks, pension providers) and issues a preliminary assessment (arsopgorelse) that the taxpayer reviews and corrects rather than building from scratch, with a formal final assessment issued after any corrections.
The Danish tax year is the calendar year. The standard individual deadline is 1 May of the following year for most taxpayers (extended to 1 July for self-employed individuals and those with more complex returns).
Denmark's headline corporate income tax (CIT) rate is 22%.
The headline personal income tax (PIT) rate is up to 57% (60.5% incl. labour market tax).
The standard VAT/GST (or equivalent consumption tax) rate is 25%.
An individual is a Danish tax resident if they have a permanent residence available in Denmark combined with a qualifying stay, or if they spend more than six months in Denmark. Residents are taxed on worldwide income; non-residents only on Danish-source income.
A non-Danish entity has a Danish permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Denmark on the entity's behalf, following the OECD Model Treaty definition as applied under Danish domestic law and any applicable tax treaty.
A foreign or Danish subsidiary is a Controlled Foreign Company where a Danish company (alone or with related parties) directly or indirectly controls more than 50% of the capital or voting rights, and more than one-third of the subsidiary's income (as assessed under Danish tax rules) consists of CFC-type income - interest, royalties, capital gains, dividends, financial leasing income, and similar financial categories. Where triggered, the Danish parent must include the CFC's total income in its own taxable base pro rata to its ownership, overriding any more favorable treaty position. There is no jurisdictional white or black list - the rules apply based purely on the ownership and income-composition tests, regardless of where the subsidiary is located.
Denmark layers three separate interest restrictions. First, a thin capitalization rule disallows interest and capital losses on controlled debt (including third-party debt guaranteed by a related party) once the debt-to-equity ratio, measured at fair market value, exceeds 4:1 - but only where controlled debt exceeds DKK 10 million; excess debt is requalified as equity and the related interest becomes non-deductible. Second, an interest ceiling rule allows net financing costs up to a fixed de minimis (DKK 21.3-22.3 million depending on the year) to be deducted regardless of the thin cap outcome. Third, an EBITDA-based rule caps remaining net financing costs at 30% of taxable EBITDA; excess costs disallowed under this rule carry forward indefinitely, and unused deduction capacity carries forward five years.
Denmark does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics compared against recognized Danish entity forms. Denmark has implemented ATAD2-aligned anti-hybrid rules denying deductions for payments producing a hybrid mismatch outcome.
No foreign bank account or foreign financial asset reporting regime exists in Denmark requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return (Denmark's automatic pre-filled assessment system - see Tax System above - captures much of this through third-party data matching rather than a dedicated disclosure filing).
Denmark provides a participation exemption for qualifying dividends and capital gains: a Danish company holding at least 10% of a subsidiary's capital is generally exempt from Danish corporate tax on dividends and capital gains from that shareholding (a lower threshold applies for holdings that qualify as "group shares" under common control), subject to conditions distinguishing genuine subsidiary/group holdings from portfolio investments (the latter remaining taxable).
Denmark has a real foreign tax credit regime for both individuals and companies, generally an ordinary credit under domestic law (Ligningsloven Section 33) capped at the Danish tax otherwise due on the same foreign-source income, applying whether or not a tax treaty is in force with the relevant country.
Denmark has concluded 77 double tax treaties.