their fair market value. However, the values assigned to the personal use of a company car, company phone and certain other benefits is determined according to special tables.
School fees paid by employers on behalf of their employees, such as international school fees, are deemed to be salary income and taxed accordingly.
Employment income is taxed with a marginal tax rate of up to 56%.
A special tax regime applies to expatriates employed by a Danish resident employer. Salary income is taxed at a flat rate of 32.84%, including the 8% labor market tax, for one or more periods up to a total of 84 months.
To qualify for the special tax regime, the individual cannot have been tax resident or otherwise tax liable to Denmark on salary or similar income or business income within the last 10 years. In addition, the individual cannot have had a controlling influence in the employing company five years before or during the employment. Additional criteria apply.
Two alternatives exist for individuals to qualify for the special expatriate tax regime. Under the first alternative, the individuals’ cash salary must be at least DKK75,100 per month (2024) and DKK78,000 per month (2025). Under the second alternative, the individual must be acknowledged as a scientist or researcher by the Danish Council for Independent Research. No minimum salary requirement applies for the second alternative.
After the 84-month period, the expatriate is taxed according to ordinary income tax rules. Income other than salary (and fringe benefits from the employer taxed as A-income) earned during the use of the special regime is subject to tax at the normal progressive tax rates.
Self-employment or business income. Business or self-employment income is taxed as ordinary income (personal income) for the business owner. Expenses are deductible to the extent they are incurred to obtain, secure or maintain business income.
Persons with business income may choose to tax this income under the Business Tax Act. Under these rules, taxable income from a trade and industry, including income from partnerships, is assessed in accordance with the principles used for companies, including rules for depreciation and write-offs.
Investment income. Net capital income includes interest income (less interest expenses), taxable gains on securities, rental income and other investment income. It is generally subject to tax as ordinary income. Dividends and capital gains on the sale of shares are taxed separately at 27% or 42%, depending on the level of income. Royalties received by residents are taxed as personal income. Royalties received by nonresidents are subject to a 22% withholding tax.
Dividends are subject to a 27% withholding tax. If total dividend income in 2024 exceeds DKK61,000 (DKK122,000 for married couples) and in 2025 exceeds DKK63,300 (DKK126,600 for married couples), residents are subject to a supplementary 15% tax.
Taxation of employer-provided stock options. Gains realized by an employee on the exercise of an option obtained under an employer-provided stock option plan are taxable. No tax is due at the time of vesting. In general, the gains are subject to the highest marginal rate of income tax, which is 52.07% in 2024 and 2025. The gains are subject to labor market tax at a rate of 8%.
Capital gains and losses. Capital gains tax is levied on individuals at rates of up to 42% in 2024 and 2025.
Gains derived from the disposal of bonds are generally taxable, and losses are deductible.
Gains derived from the disposal of shares are taxable as share income at a maximum rate of 42%. On departure from Denmark, shareholders are deemed for tax purposes to have disposed of their shares at the fair market value and are taxed on the deemed gain. If a shareholder applies for an extension and does not pay the exit tax, the shareholder may obtain a refund of the difference between the tax on the deemed gain and the tax on any subsequent lesser gain actually realized. The tax on the deemed gain applies only to individuals who have been subject to unlimited tax liability for one or more periods, totaling seven years within the 10 years before departure and who have a share portfolio with a value of at least DKK100,000 at exit.
Gains derived from the disposal of residential property are not taxable if the owner occupied the property and if certain other conditions are met. Gains derived from the disposal of other real property are taxable as capital income.
Deductions
Deductible expenses. Contributions to annuity pension and discontinued annuities pension schemes are deductible up to an annual maximum of DKK63,100 (2024) and DKK65,500 (2025), while contributions to certain employer-administered life annuity schemes are fully deductible.
Interest paid on all types of debt is deductible from capital income. If this results in a total negative net capital income, approximately 25% to 33% (2024) of the negative amount may be offset against tax payable on other income.
Items that may be deducted from taxable income include, among others, the following:
• Commuting costs to and from work (special rates)
• Fees paid to labor unions and unemployment insurance
• Child support and spouse support or alimony payments
Personal deductions and allowances. Each taxpayer is permitted the following:
• A personal allowance of DKK49,700 (2024)
• A personal allowance of DKK49,700 (2024) and DKK51,600 (2025)
• A supplementary allowance for salaried employees of 10.65% of salary income, up to a maximum amount of DKK45,100 (2024) and DKK 55,600 (2025)
• A job deduction for salaried employees of 4.5% of the salary income above DKK216,100, up to a maximum deduction of DKK2,800 (2024) and DKK2,900 (2025)
Other mandatory contributions for coverage in Denmark do not apply.
Totalization agreements. To provide relief from paying double social security contributions and to assure benefit coverage, Denmark has entered into totalization agreements, which usually apply for periods up to 36 months, with the following jurisdictions.
Australia Greenland North Macedonia
Bosnia and Iceland Norway Herzegovina India Pakistan
Canada* Israel Philippines
Chile Korea (South) Serbia
China Mainland Liechtenstein Switzerland
European Union Montenegro Türkiye
(EU) Member States Morocco United Kingdom
Faroe Islands New Zealand United States
* Including Quebec
D. Tax filing and payment procedures
The Danish tax year is the calendar year. Before each tax year, an advance income assessment must be made for each taxpayer. Advance tax is paid through deductions (withholding) from employment income. In addition, if self-employment income or net capital income rises to a certain level, advance tax is paid through prepayments claimed from the individual by the authorities in 10 installments over the tax year, based on the advance assessment.
After each tax year, taxpayers must file tax returns no later than 1 May/1 July of the following year. Any overpaid tax is refunded by the tax authorities when the final tax assessment notice is issued. Underpaid tax up to DKK23,100 (regarding the 2024 income year) plus penalty interest is carried forward to the 2026 income year, while the remainder is due in three installments in August, September and October 2025. Married persons must file separate tax returns. In the tax calculations, certain deductions may be transferred between the spouses.
Voluntary payment of tax may be made during the fiscal year and until 1 July of the following fiscal year in order to save some of the penalty interest on underpaid tax.
E. Double tax relief and tax treaties
If a Danish resident taxpayer receives income from abroad, tax relief may be provided either through a foreign tax credit or by exemption with progression. Relief is provided in accordance with either a tax treaty or Danish domestic law.
Danish law grants a foreign tax credit for income taxes paid abroad. The credit may not exceed the lesser of the income tax paid abroad or the Danish tax payable on the same income. Domestic Danish law also contains an exemption with progression that applies to salary income for work performed outside Denmark during working periods exceeding six months. Further conditions must be met. The rule applies only to individuals who are tax residents in Denmark according to domestic law (that is, fully taxable) while working abroad.
Denmark has entered into double tax treaties with the following jurisdictions.
Argentina Guernsey Norway
Armenia Hong Kong
Philippines
Australia (shipping) (d) Pakistan
Austria Hungary Poland
Azerbaijan Iceland Portugal
Bangladesh India Romania
Belarus Indonesia Russian
Belgium Ireland Federation (a)
Bermuda Isle of Man Serbia
Brazil Israel (c) Singapore
British Virgin Italy Slovak Republic
Islands (d) Jamaica Slovenia
Bulgaria Japan South Africa
Canada Jersey Sri Lanka
Cayman Islands
Jordan (d) Sweden
Chile Kenya Switzerland
China Mainland (b) Korea (South) Taiwan
Croatia Kuwait Tanzania
Cyprus Latvia Thailand
Czech Republic Lebanon Trinidad
Egypt Lithuania and Tobago
Estonia Luxembourg Tunisia
Faroe Islands Malaysia Türkiye
Finland Malta Uganda
France Mexico Ukraine
Georgia Montenegro
United Kingdom
Germany Morocco United States
Ghana Netherlands Venezuela
Greece New Zealand Vietnam
Greenland North Macedonia Zambia
(a) The treaty has been terminated from 1 January 2024. (b) The treaty does not apply to Hong Kong or Macau. (c) This treaty does not apply to the Palestinian Authority. (d) These treaties primarily concern air and/or maritime traffic.
The treaty with Spain was terminated, effective from 1 January 2009.
F. Work and residence permits
Denmark is a member of the EU and of the Nordic Council. Consequently, varying rules apply for EU nationals, for citizens of Scandinavian countries (Finland, Iceland, Norway and Sweden) and for non-EU nationals who wish to enter Denmark to live and work there.
The ordinary rules for EU citizens apply to citizens of Switzerland, as well as to citizens of Iceland, Liechtenstein and Norway, and the non-EU members of the European Economic Area (EEA).
Scandinavians. Nationals from Scandinavian countries may live and work in Denmark without restrictions. However, if they take up residence in Denmark for more than six months, they must register with the National Registration Office (the CPR registration system) in their local municipality.
Occupations (DISCO) codes to determine the standard Danish salary for the job in question. The DISCO code is an employment categorization code, which can be used to determine the average salary for the particular position given the educational background, prior relevant experience and the position to be occupied in Denmark. If the applicant continues to meet the condition of the original work and residence permit, the permit can be extended. If the individual applies for an extension before the expiration of the current work permit, he or she remains compliant and is allowed to continue living and working in Denmark until the extension application has been processed. If the terms on which the permit is based continue to be met, the permit can continue to be extended.
If an individual already holds a Danish residence permit based on family reunification, asylum, or humanitarian grounds or holds a dependent residence permit, a separate work permit is not required, unless the individual will work in the same company as the main applicant (sponsor) or a closely related company. If this is the case, a separate work permit is required. A special scheme is available for this purpose.
To live and work in Denmark for more than three months, nonEU nationals must generally register in the CPR register.
Non-EU nationals rendering a service in Denmark on behalf of an employer outside of Denmark may be eligible to apply for a permit to work in Denmark as posted employees under EU rules.
For EU rules to apply, the services to be rendered (in Danish: tjenesteydelser) must be services usually rendered for payment. Furthermore, the work in Denmark must be of a temporary nature and the job to be undertaken in Denmark must be defined clearly.
If the company in Denmark to which a non-EU national is posted is a subsidiary or a branch of the EU company (the company from which the individual is posted to Denmark), the posting can generally not take place under EU rules (new interpretation of Section 4 of the EU Directive implemented in Denmark in mid2019).
Family members. After specific consideration, residence permits may be granted to family members of individuals who have residence and work permits in Denmark. Separate applications for each family member must be filed.
Biometric residence cards. Citizens of non-EU jurisdictions are issued biometric residence cards, which include the holder’s facial image and fingerprints stored on a microchip embedded in the card. The residence card allows the non-EU national to travel within the Schengen area. If the individual does not have a valid residence card in his or her possession, he or she is required to apply for a re-entry permit to be able to enter Denmark after exiting the country.
Self-employment. Permission to be self-employed in Denmark is normally granted depending on, among other items, the nationality of the individual in question. However, for certain types of