Denmark Corporate Tax - Guide for International Expansion

Are you planning to do business in Denmark? Then it's essential to understand how corporate income tax works and what it means for your company.

In this guide, we'll break down everything you need to know about corporate taxes in Denmark, from setting up your business to staying compliant. Whether you're launching a new venture or expanding your business, understanding your tax obligations is key to running a successful operation in this Nordic country.

And if you're looking for smart ways to save money and manage international payments, we'll also show you how a Wise Business account can help simplify cross-border transactions and keep your finances running smoothly.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Denmark corporate tax rate

The corporate income tax rate in Denmark is 22% for all companies, regardless of their size or profit level. This rate applies to both resident and non-resident companies operating in Denmark.¹

Denmark's corporate tax rate is slightly below the OECD average of 23.85% and the EU average of 21.27%. The country has maintained a competitive tax environment whilst ensuring sufficient revenue for its comprehensive welfare state and public services.²

Danish companies are subject to corporate income tax on their worldwide income, whilst non-resident companies are only taxed on income derived from Danish sources.¹ This includes income from permanent establishments, real estate, and certain types of investment income.¹

The tax year in Denmark follows the calendar year, running from 1 January to 31 December, though companies can apply for permission to use a different accounting period if needed for business reasons.³

Read more about the corporate tax in United States

How to pay corporate tax in Denmark

Corporate tax in Denmark is administered by the Danish Tax Agency (Skattestyrelsen), and companies must use the digital tax system called "E-tax for companies" (TastSelv Selskabsskat) for filing returns and making payments.⁴ Late filing incurs penalties, and interest is charged on overdue payments.⁶

All corporate tax payments in Denmark must be made in Danish kroner (DKK).³ If your company's functional currency is not the Danish krone, you'll need to convert your figures using the exchange rates specified by the Danish Tax Agency.

Danish companies are required to file their corporate tax returns within 6 months after the end of their income year. For companies following the calendar year, this means the deadline is 1st of September.⁵

Let's say your company has a turnover of DKK 11.2 million (approximately £1.5 million) and operates with a profit margin of 10%, giving it a taxable profit of DKK 1.12 million.

At Denmark's corporate tax rate of 22%, the tax owed would be:

DKK 1.12 million × 22% = DKK 246,400

If your company misses the tax payment deadline by 30 days, interest will be charged on the outstanding amount. The Danish Tax Agency sets interest rates that are updated regularly.⁶

When expanding your business to Denmark, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Denmark

Compliance with Danish tax regulations is key to running a business smoothly. After incorporation, companies must register with the Danish Customs and Tax Administration (SKAT) for corporate income tax, VAT, and employer taxes. Registering early helps avoid delays and supports a clear corporate tax strategy.

Every company must also prepare annual financial statements in line with the Danish Financial Statements Act. These must be filed electronically with the Danish Business Authority within six months of the financial year’s end. Failure to file on time leads to management fines ranging from DKK 500 to 3,000.⁷ Many businesses use a corporate tax assistant or accountant to meet these deadlines.

Know that VAT compliance depends on turnover:⁸

• Under DKK 5 million: filed biannually.
• Under DKK 50 million: filed quarterly.
• Above DKK 50 million: filed monthly.

Deadlines run from the 25th of the following month to the 1st of the third month after the period. Missing filings triggers fines of DKK 800 per declaration, 0.7% monthly interest on late payments, and reminder fees of DKK 65.

Like in every developed economy, building a reliable corporate tax provision system and exploring available corporate tax relief options in Denmark ensures businesses remain financially efficient.

International Expansion to Denmark

Business planning for overseas expansion should consider Denmark at the top of their lists. The country has a population of 5.9 million and one of the EU’s highest GDP per capita levels at €48,000, well above the EU average.⁹ Its strong industrial production, led by pharmaceuticals and other high-value exports, supports consistent growth. In 2024, the Danish economy recorded a 3.7% annual growth rate, driven by net exports and innovation across industries.¹⁰

The region’s role in the EU Single Market makes it a strategic entry point for international businesses. Companies benefit from access to millions of consumers without trade restrictions. Price stability and affordability are the other strong advantages: Denmark’s inflation rate 2024 was only 1.3%, lower than the EU average of 2.6%. High purchasing power and sustainable practices further boost the country’s appeal. Almost 44% of Denmark’s energy consumption comes from renewable sources, compared to an EU average of 24.6%.¹¹

The infrastructure and connectivity of this region are equally impressive. Copenhagen Airport is the largest hub in the Nordic region, linking directly to 186 destinations and giving access to more than 500 million consumers within a three-hour radius.¹² By 2029, the Fehmarn link will provide a faster road and rail connection to Germany and Central Europe, strengthening Denmark’s position as a Northern European gateway.¹³

Denmark is also recognized globally for its competitiveness. The IMD Global Competitiveness Index 2025 ranks Denmark as the top EU country and fourth worldwide.¹⁴ This reflects strengths in government efficiency, infrastructure, and business performance.

Setting up a company in Denmark involves the following steps:

1. Conduct market research to identify your target customers and competitors.
2. Write a clear business plan outlining goals, operations, and marketing strategies.
3. Finalize details like business name, location, workforce, and supply chain.
4. Choose a business structure that fits your needs.
5. Register with the Danish Business Authority.
6. Complete corporate tax registration with SKAT, the Danish Customs and Tax Administration.
7. Set up a reliable bookkeeping and compliance system to manage corporate tax requirements and avoid issues such as late filing of corporate tax returns and penalties.

Denmark has a strong economy, modern infrastructure, and an efficient corporate tax system. These are the reasons why it was named one of the 10 Best European Countries for Business in 2025.

Read more about the corporate tax in Nevada

Incorporation of Business in Denmark

To incorporate a business in Denmark, companies must register online with the Danish Business Authority (DBA). The process is digital, transparent, and efficient. Once registration is complete, the company receives a unique Company Register Number (CVR), which is required for all business activities.

When setting up a business, you’ll need:¹⁴

• Legal structure: Decide the most suitable entity type for your operations.
• Memorandum of Association: This document includes business details such as name, registered office, directors, and shareholders.
• Articles of Association: Acts as the company’s constitution and defines shareholding, governance, and voting rights.
• Share capital: Paid into the company’s bank account or the attorney’s client account before registration.
• Registration: Once documents are signed and capital is paid, the business can be registered online with the DBA.

Companies should also factor in Denmark’s corporate tax rate, which is currently 22%.¹ Many international investors consider this competitive compared to other EU countries.

Business Entities in Denmark

According to the Danish Companies Act,¹⁵ the main types of business entities are:

• Public Limited Liability Company (A/S): Capital is divided into shares (“aktier”), which may be offered to the public. Shareholders are only liable for their individual contributions. This entity requires a minimum share capital of DKK 400,000. It is often chosen by larger companies or those planning public offerings.
• Private Limited Liability Company (ApS): A limited liability company where shares (“anparter”) cannot be publicly offered. Shareholders’ liability is limited to their contributions. The minimum share capital requirement is DKK 40,000, making it a popular choice for small and medium-sized businesses.

International corporate tax best practices

Here are some of the best strategies to ensure compliance with local tax laws, save more money, and reduce tax burdens when operating internationally.

Stay compliant with local and international tax laws

Complete the legal registration process in every country where your business operates. File all required tax returns on time to avoid penalties, and ensure you stay up to date with local tax laws to remain fully compliant.

Global standards set by organisations

Companies should understand and adhere to global standards set by organisations like the Organisation for Economic Co-operation and Development (OECD). With frameworks like Base Erosion and Profit Shifting (BEPS) and Pillar Two Global Minimum Tax, companies can ensure they are transparent, prevent tax avoidance, and avoid legal risks. Denmark has implemented the Minimum Tax Act, incorporating Pillar Two into Danish law with an effective minimum taxation rate of 15%.

Leverage double taxation treaties (DTTs)

DTTs are essential in making sure that you're not taxed on the same income twice. Therefore, CFOs and Directors need to have a clear understanding of these treaties between the countries in which your business operates and how they can potentially relieve your tax burden. Denmark has an extensive network of double taxation agreements with numerous countries.

Maintain up-to-date and transparent financial records

Maintaining clear and up-to-date financial records helps companies prepare accurate tax returns, reducing the risk of errors that could lead to penalties. Additionally, having organised financial records simplifies the process during financial audits and helps demonstrate compliance with Danish tax requirements.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Denmark efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details

(only with Wise Business Advanced)

for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Denmark

Who is liable for corporate tax in Denmark?

All companies incorporated in Denmark are liable for corporate tax on their worldwide income at a rate of 22%. Non-resident companies are subject to Danish corporate tax only on income derived from Danish sources, such as through a permanent establishment or from Danish real estate investments.⁸

Are there any tax incentives for businesses in Denmark?

Denmark offers several tax incentives for businesses. The corporate income tax rate is 22 %, below the OECD average. Companies may claim a full deduction for patents and know-how in the year of acquisition. R&D expenses are deductible when incurred, with an enhanced deduction of 108 % to 120 % depending on the year. Businesses incurring R&D-related losses can receive a cash reimbursement equal to 22 % of the losses, up to a maximum tax value of DKK 5.5 million. A special tax scheme for expatriates, key employees, and researchers allows a gross rate of 27 % (total ~32.84 % including labour contribution) for up to 7 years.

What is the tax treatment of dividends in Denmark?

Dividends may generally be received and distributed without tax under Danish corporate taxation rules. This means that dividends received by Danish companies from other companies are typically exempt from corporate tax under certain conditions.

What is the process for registering for corporate tax in Denmark?

Companies must register with the Danish Business Authority and obtain a CVR number. They must then register for corporate tax with the Danish Tax Agency and use the E-tax for companies system (TastSelv Selskabsskat) for all tax filings and payments. This system is mandatory for all companies, foundations, and associations.

What are the common pitfalls to avoid regarding corporate tax in Denmark?

Common pitfalls include failing to use the mandatory E-tax system for filing returns, missing the 6-month deadline for filing corporate tax returns after the income year end, not properly managing joint taxation group changes before filing, and failing to maintain proper basic company information through the system. Companies should also ensure they understand the requirements for advance tax payments and maintain accurate records in Danish kroner.

Sources used in this article:

1. PwC Tax Summaries: Denmark Corporate Income Taxes
2. Tax Foundation: Corporate Tax Rates by Country 2024
3. Ecovis: Denmark Tax Guide
4. Skat.dk: Declaring Corporation Tax
5. Skat.dk: Tax Return for Companies and Foundations
6. Generis Online: Understanding Corporate Income Tax Rules in Denmark
7. Erhvervsstyrelsen.dk: Annual Reports
8. Taxually: VAT Manuals - Denmark
9. European Union: Denmark
10. European Commission: Economic Forecast Denmark
11. Eurostat: Country Facts
12. Invest in Denmark: Why Invest in Denmark
13. AP News: Fehmarnbelt Fixed Link
14. Invest in Denmark: Denmark Tops Global Competitiveness Charts
15. Danish Business Authority: Consolidating Act on Public and Private Limited Liability Companies (PDF)

Sources last checked 08/09/2025

*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.