Denmark's corporate income tax rates and tax system provide a stable environment for businesses. Alongside corporate income tax, businesses operating in Denmark should be aware of other taxes, including VAT, payroll taxes, withholding tax, property tax, and municipal taxes. It is advisable to consult with a tax professional or refer to the official website of the Danish tax authority for the latest tax regulations and requirements. By understanding and fulfilling their tax obligations, businesses can navigate the tax landscape in Denmark and contribute to the country's economic growth.
Corporate Income Tax:
Denmark imposes corporate income tax on the profits earned by companies operating within its jurisdiction. The corporate income tax rate in Denmark is progressive, based on the level of taxable income. As of the knowledge cutoff date in September 2021, the tax rates are as follows:
- Companies with taxable income up to DKK 7.5 million: 22%
- Companies with taxable income exceeding DKK 7.5 million: 25%
It's worth noting that Denmark operates on a worldwide taxation system, meaning that both domestic and foreign income is generally subject to taxation.
Types of Business Taxes in Denmark:
Value Added Tax (VAT): Denmark follows the European Union's VAT system. The standard VAT rate in Denmark is currently set at 25%. However, certain goods and services are subject to reduced rates of 0% or reduced rates ranging from 5% to 25%.
Payroll Taxes: Employers in Denmark are required to withhold payroll taxes from their employees' wages. Payroll taxes include social security contributions, health insurance contributions, and labor market contributions. The rates for these contributions vary based on income brackets and specific circumstances.
Withholding Tax: Denmark imposes withholding tax on certain types of income, such as dividends, interest, and royalties paid to non-residents. The withholding tax rates vary depending on tax treaties and exemptions, but they generally range from 15% to 27%.
Property Tax: Property owners in Denmark are subject to property taxes, which are levied on the ownership of real estate properties. The tax rates vary depending on the location, size, and value of the property.
Municipal Taxes: Municipalities in Denmark have the authority to levy additional taxes on businesses, such as local business taxes and advertising taxes. The rates and specific taxes vary among municipalities.
Danish Tax Authority Website:
For detailed and accurate information on business taxes in Denmark, it is recommended to visit the official website of the Danish tax authority, the Danish Customs and Tax Administration (SKAT).
Danish Tax Authority Website: Official Danish Tax Authority Website