TAX CONSULTATION IN DENMARK

Types of taxes in Denmark

The rate of this tax in Denmark is one of the highest not only in Europe but also in the whole world. The tax rate in Sepredny is 53%. The following types of income are subject to taxation:

• salary for work performed in Denmark paid by or on behalf of an employer with a legal venue in Denmark
• salary for work performed in Denmark where the stay exceeds 183 days within 12 months
• certain other types of personal income, including directors’ fees, pension distributions, and social security benefits
• remuneration covered by the special rules on hiring out personnel (see Workforce hire scheme below)
• income arising from a business enterprise with a permanent establishment (PE)
• income from property located in Denmark
• dividends from Danish companies
• royalty income from Denmark, and
• remuneration for advisory assistance, under certain circumstances.

Corporate tax

If you intend to set up a company in Denmark, corporate taxes at the rate of 22% will apply. However, corporate taxes depend on whether the company is domiciled in Denmark or elsewhere. A resident company in Denmark pays full taxation, as it is considered that all its income is derived from the country. Companies registered elsewhere but operating in Denmark are subject to corporation tax.

• Inheritance, estate, and gift taxes

Inheritance left by a Danish resident is, in general, subject to Danish estate tax regardless of the country of residence of the beneficiary. Inheritance received by a Danish resident from an individual who was not resident in Denmark prior to death is not subject to Danish estate tax except if the inheritance consists of property located in Denmark or of assets related to a PE in Denmark. Estate tax amounts to 15% and is levied on the part of the assets that fall to the deceased’s children and descendants, stepchildren and their descendants, parents, or cohabitant during the last two years of one’s life.

Gifts and donations not exceeding DKK 69,500 (in 2022) to the donor’s descendants are tax-exempt. Gifts to the descendant’s spouses may not exceed DKK 24,300 (in 2022) in order to be tax exempt. Gifts and donations to the donor’s offspring and their descendants in excess of DKK 69,500 are levied with a gift tax amounting to 15%, and gifts to the donor’s stepparents and grand stepparents are levied with a gift tax of 36.25%. Gifts or inheritance between unrelated individuals is taxable as ordinary income if the recipient is fully taxed liable to Denmark.

• Property value tax

Property owners are obligated to pay property value tax. Property value tax annually amounts to 0.92% of the value of a property up to DKK 3,040,000 and 3% of the value exceeding DKK 3,040,000. However, if the property was purchased no later than 1 July 1998, a deduction is granted. Properties that are rented out are not subject to property value tax, regardless of where the property is situated. Instead, the net profit from the rental business is taxable.

• Luxury and excise taxes

In Denmark, numerous excise taxes and duties apply on goods (e.g. light balls, sugar, liquor, tobacco). The taxes/duties are indirectly paid by the consumer through the prices of the goods and are thereby withheld and paid to the authorities by the entity selling the goods. A number of these taxes are expected to be reduced or abolished in the coming years.

• Stamp taxes

In general, stamp duty primarily occurs in connection with the registration of rights regarding property and land. Furthermore, insurance documents are liable to stamp duty if the risk is situated in Denmark.

• Taxes/duties regarding cars

When a motor vehicle is registered in Denmark for the first time, a registration duty must be paid. The motor vehicle cannot get a license plate before the duty has been paid. The rates in 2022 for passenger cars are 25% of the value up to DKK 65,800, 85% of the value from DKK 65,801 up to DKK 204,600, and 150% of the value in excess.

• Tax regarding the growth of a pension scheme (PAL tax)

In Denmark, individuals are taxed on the growth of their pension schemes. The tax rate is fixed at 15.3%. It is possible for individuals moving abroad to apply for exemption from this tax. PAL tax is collected by the insurance company or pension fund, etc. that is obligated to withhold and pay the tax on behalf of the owner of the plan.

Optimization of taxation in Denmark

Any business, and even more so a newly created company, needs the professional help of lawyers in matters of tax optimization. Legal tax optimization solutions are what we specialize in. We will help you save money so that your business develops quickly and brings profit.

A tax lawyer (lawyer) in Denmark will help you choose the optimal tax system for your business in Denmark.

Representation in the tax authorities in Denmark by the “Prykhodko and Partners” law firm includes consulting, preparation of all necessary documentation, and relations with the tax authorities of Denmark and the EU in matters of taxation.

What is included in the duties of a tax lawyer of Prykhodko and Partners JSC:

• Consulting on taxes in Denmark;
• Calculation of taxes in Denmark;
• Preparation of tax documents in Denmark;
• Tax representation in Denmark;
• Settlement of tax disputes in Denmark

What is the cost of a tax consultation in Denmark?
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