Denmark ApS Tax Explained: Corporate Tax, Moms and Salary Rules in 2025

Running a company in Denmark is genuinely straightforward once you understand the three tax pillars: selskabsskat (corporate tax at 22%), moms (VAT at 25%), and personal taxation on what you extract as salary or dividends. The rates look punishing on paper, but the Danish system is more predictable than most, and the dividend tax thresholds create real planning room for owner-directors.

This guide covers everything a Danish ApS founder needs to know: the corporate tax calculation, moms registration and filing, the salary-versus-dividend optimisation, employer-side costs, and the digital bookkeeping requirements that took effect under Bogføringsloven in 2024.

All figures use 2025 thresholds unless noted. Amounts are in Danish kroner (DKK). For reference: 1 EUR is approximately DKK 7.46 (the krone is pegged to the euro within the ERM II).

Selskabsskat: 22% corporate income tax

Denmark's corporate income tax rate is 22%, applied to the ApS's taxable net profit. This rate has been stable since 2016, when it was cut from 23.5%, and there are no plans to change it. Unlike the UK's variable rate structure or the US's federal-plus-state complexity, Danish selskabsskat is a single flat rate with no small-company relief or surcharge.

What counts as taxable profit

Taxable profit is accounting profit adjusted for:

• Non-deductible items: fines, certain entertainment costs above DKK 750 per person per event, private use of company assets
• Depreciation differences: tax depreciation on plant and equipment follows afskrivningsloven (the Depreciation Act) rather than accounting rules. The standard tax depreciation rate for machinery is 25% declining balance
• Loss carry-forward: losses can be carried forward indefinitely but can only offset up to 60% of taxable income in any year above DKK 9,135,000 (2025 threshold). Below that threshold, losses can be offset in full. There is no carry-back

When you pay it

Corporate tax is not paid annually in a single lump. Denmark uses a prepayment system (acontoskat):

• Two equal prepayments: 20 March and 20 November of the income year
• Final settlement: settled in the company tax return (selvangivelse), with any balance paid by 20 November of the following year
• Late payment interest accrues at approximately 4-5% per annum (rate set by Skat each year)

First-year companies often underestimate the November prepayment because the March instalment may be zero. Set aside 22% of monthly profit as a rolling reserve from day one.

Loss companies

If the ApS makes a loss, there is no refund of selskabsskat. The loss carries forward to reduce future profits. This is a common cashflow trap for early-stage founders: a profitable year follows a loss year, the full 22% hits the profitable year's profit (up to the carry-forward threshold), and the tax liability arrives before the company has rebuilt its cash position.

Moms: 25% VAT — the EU's highest rate

Denmark charges moms at 25% on most goods and services. This is the joint-highest standard VAT rate in the EU, tied with Hungary (which also charges 27% on some items — making Denmark's 25% technically the EU's highest standard rate applied uniformly across goods and services).

Why Denmark has no reduced rate

Most EU countries operate two or three VAT rates: a standard rate, a reduced rate (5–13%) for essentials like food and books, and sometimes a super-reduced or zero rate. Denmark is the exception. With limited carve-outs, 25% applies to almost everything. There is no reduced rate for groceries, energy, or hospitality. The zero rate applies only to specific exempt categories.

Zero-rated or exempt supplies include:

For a founder running a software company, consultancy, or product business selling to Danish or EU customers, the near-universal 25% rate means the compliance calculation is simple: charge 25%, reclaim 25% on inputs.

Registration threshold

You must register for moms once your annual turnover exceeds DKK 50,000. This is a very low threshold — roughly EUR 6,700 or £5,700. Almost every trading ApS will cross it in its first quarter of operation. Registration is done through Virk.dk.

Filing frequency

Skat assigns filing frequency based on turnover:

Most small ApS companies file biannually. Returns are due one month and ten days after the period ends. So the first half of the year (January-June) has a deadline of 10 August; the second half (July-December) has a deadline of 10 February.

Input moms (fradragsret)

You can reclaim moms on business inputs, subject to the standard rules:

• 100% reclaim on goods and services used exclusively for taxable business purposes
• Partial reclaim (forholdsmæssig fradragsret) where costs are mixed business and personal
• No reclaim on costs relating to exempt activities
• Restaurant and catering: only 25% of the moms on business meals is reclaimable (a common gotcha — the rule is 25% of the 25%, so roughly 6.25% of the gross restaurant bill)
• Motor vehicles: no moms reclaim on the purchase of passenger cars (varebiler/vans follow different rules)

EU B2B sales and moms

If your ApS sells services to VAT-registered businesses in other EU countries, the supply is generally zero-rated under the reverse charge mechanism. The buyer accounts for their country's VAT. You still need to submit EU-salgslisterne (EC Sales Lists) quarterly via TastSelv Erhverv, reporting the total value of intra-EU B2B services.

How Denmark compares to its neighbours

Denmark sits in a region of high corporate and personal taxes. The comparison below puts the selskabsskat rate and standard VAT in context:

Denmark's corporate rate is competitive for the region. The headline disadvantage is the flat 25% moms with no reduced rate, and the steep personal income tax that shapes how founders extract profits.

Dividend taxation: the Aktionærmodellen

When an ApS pays a dividend to its Danish resident owner, the tax is governed by aktionærmodellen (the shareholder model). There are two rates, separated by an annual threshold:

The DKK 61,000 threshold applies per person. A married couple or registered partners can each use their own threshold, so a founder with a spouse who also holds shares can access up to DKK 122,000 at the 27% rate before the 42% rate kicks in.

How the dividend tax is collected

For a sole-owner ApS, the company does not withhold dividend tax at source. The owner reports the dividend on their personal tax return (selvangivelse), and Skat calculates the liability. For companies with multiple shareholders, the ApS must withhold 27% udbytteskat at source and remit it to Skat, with the shareholder claiming a credit or refund on their personal return if their actual marginal rate is lower.

Comparing dividend tax to salary tax

The effective combined tax burden on a dividend — corporate tax plus dividend tax — determines whether dividends or salary is more efficient. Here is the comparison at a DKK 1,000,000 profit level:

Salary route (all profit taken as salary)

Dividend route (all profit taken as dividend)

Optimised split (worked example in next section)

Neither extreme is optimal. The right answer lies in the middle: a salary up to the top-rate threshold, with residual profit retained in the company or distributed as dividends up to the 27% threshold.

Worked example: DKK 1,000,000 ApS profit

Mette owns 100% of Mette Consulting ApS. The company earns DKK 1,000,000 net profit in 2025 before any salary. Mette has no other income. She is single (cannot split the dividend threshold with a partner). What is the optimal extraction strategy?

Key thresholds for 2025

• Topskattegrænse (top tax bracket threshold): approximately DKK 588,900 in personal income after AM-bidrag. Above this, the marginal rate reaches 55.9%.
• Personfradrag (personal allowance): DKK 49,400 — income below this is tax-free
• AM-bidrag (labour market contribution): 8% of gross salary, deducted before income tax

Optimal salary

Mette should pay herself a salary up to but not significantly above the topskattegrænse. Taking this to approximately DKK 640,000 gross salary avoids or minimises exposure to the 55.9% top rate.

Residual company profit after salary

Mette can distribute DKK 61,000 as a dividend at 27%, paying DKK 16,470 in dividend tax. The remaining DKK 219,800 stays in the company for future investment, further dividends in a later year (resetting the 27% threshold annually), or reinvestment.

Summary

On DKK 1,000,000 pre-tax profit, Mette takes home roughly DKK 434,000 in cash and leaves DKK 220,000 growing in the company. All-salary would yield around DKK 488,000 but leave nothing in the company and creates full social security exposure. All-dividend would yield DKK 462,000 but pays corporation tax on the full profit.

The right split depends on personal income tax rates (your specific municipality's kommuneskat matters), marital status, whether you have a holdingselskab structure, and how much capital the business needs to retain.

VS O — the Virksomhedsskatteordningen for sole traders

The Virksomhedsskatteordningen (VSO) is not relevant to an ApS — it is a special tax regime for sole traders (enkeltmandsvirksomhed) and partnership shares (interessentskab). It is included here because Danish founders often consider sole trading before incorporating, and the VSO is the main reason some choose to delay or avoid incorporation.

What the VSO does

The VSO allows a sole trader to:

• Deduct business interest at the full business income rate rather than the lower personal capital income rate
• Defer personal income tax by retaining profits in a notional "business account" (virksomhedsordningen konto), taxed at the same 22% corporate rate as selskabsskat
• Smooth income across years, reducing exposure to the top rate

Effectively, the VSO lets a sole trader access corporate-rate taxation on retained profits without incorporating. The 22% deferral rate matches selskabsskat.

Why founders still incorporate

Despite the VSO's advantages, most serious businesses incorporate as ApS for three reasons:

1. Limited liability: the ApS provides genuine liability separation. A sole trader's personal assets are at risk
2. Investor readiness: outside investors, co-founders, and employee share schemes require a corporate structure
3. Sale of the business: selling shares in an ApS is generally more tax-efficient than selling sole trader goodwill, particularly if a holdingselskab structure is used

The VSO suits a single-person consultancy or freelancer who wants corporate-rate profit retention without the administration of an ApS. Once the business scales beyond one person, the ApS almost always wins.

Employer costs on salary

When an ApS pays a salary, it incurs costs beyond the gross wage. These are often overlooked when founders model their extraction strategy. The main employer-side obligations are:

ATP (Arbejdsmarkedets Tillægspension)

ATP is Denmark's mandatory supplementary pension. Both the employer and the employee contribute. For a full-time employee in 2025, the employer pays DKK 2,272 per year (or DKK 568 per quarter). This is a flat-rate contribution, not a percentage of salary, so it is a small but unavoidable cost.

A founder taking a salary from their own ApS counts as an employee for ATP purposes.

AER (Arbejdsgivernes Erhvervssygdomssikring)

AER is occupational disease insurance. The annual contribution is approximately DKK 500-700 per employee (varies by industry). It is modest but mandatory.

Feriepenge (holiday pay)

Employees accrue 2.08 days of holiday per month (25 days per year). Under ferieloven (the Holiday Act), employers must either:

• Pay holiday pay at 12.5% of gross salary into FerieKonto (the government holiday fund), or
• Pay it directly in the salary with an equivalent supplement

For a founder-director, the obligation applies if you are taking a salary. Feriepenge at 12.5% is a meaningful additional cost on top of gross salary. On a DKK 640,000 salary, feriepenge adds DKK 80,000, bringing the total employment cost to DKK 720,000 plus ATP and AER.

Barselsfond (maternity/paternity fund)

All employers must contribute to the barselsfond, which funds parental leave. Contributions are collected via ATP and are small — roughly DKK 600-700 per full-time employee per year. They are included in the ATP collection process.

Summary: total employer cost on a DKK 640,000 salary

The difference between DKK 640,000 and DKK 723,572 is nearly DKK 84,000 — worth including when comparing salary versus dividend as an extraction method.

Bogføringsloven: digital bookkeeping from 2024

The new Bogføringsloven (Bookkeeping Act) came into force in 2022, with phased requirements taking effect in 2024 and 2025. For an ApS, the key obligations are:

Continuous bookkeeping requirement

The Act requires that bookkeeping be kept up to date and stored digitally. "Continuously" means entries should be posted within a reasonable time of the underlying transaction — the expectation is weeks, not months. Quarterly catch-up sessions are no longer compliant in the spirit of the law.

Digital accounting system requirement (from 2024)

From 2024, larger companies are required to use an approved digital accounting system (godkendt regnskabsprogram). Erhvervsstyrelsen (the Danish Business Authority) maintains a list of approved systems.

The digital requirement is being phased in by company size:

Most founder-run ApS companies will need a compliant digital system from 1 January 2026. The software must support SAF-T export (the Danish standard for digital audit files) and meet specific data retention requirements (five years).

Invoice requirements

Danish tax law requires invoices to contain:

• Sequential invoice number
• Issue date
• ApS CVR number
• Customer's name and address
• Description of goods or services
• Quantity and unit price
• Moms amount and rate (or statement that the supply is exempt/zero-rated)
• Total amount including and excluding moms

For EU B2B sales, the customer's EU VAT number must also be included.

Retention period

Financial records, including invoices, bank statements, and bookkeeping entries, must be retained for five years from the end of the accounting year.

Danish ApS filing deadlines

Late filing penalties

Skat takes late filing seriously:

• Late moms returns attract a default surcharge of DKK 800 plus interest at the current rate (~5% per annum)
• Late company tax return attracts a surcharge and can trigger an estimated assessment
• Late annual accounts filed with Erhvervsstyrelsen attract fines starting at DKK 4,000 and can result in compulsory dissolution

The annual accounts deadline is the one most commonly missed by first-year founders. If your financial year ends 31 December 2025, the accounts must be filed with Erhvervsstyrelsen by 31 May 2026.

Holdingselskab structures

Many Danish founders structure their ownership through a holdingselskab (holding company) — a second ApS that owns the shares of the operating ApS (driftsselskab). This is a standard Danish tax planning structure for two reasons:

Participation exemption (skattefri udbytter)

Dividends paid from a subsidiary (driftsselskabet) to a parent company (holdingselskabet) that owns at least 10% of the shares are tax-free (skattefri). This means 78% of the operating company's profit can be moved up to the holding company tax-free (the company has already paid 22% selskabsskat; the dividend move is then free).

Once capital is in the holdingselskab, the founder can:

• Reinvest in other companies
• Hold diversified investments (shares, bonds)
• Draw dividends from the holding company to personal level when needed, subject to the 27%/42% rates
• Defer personal taxation indefinitely while the money remains in the holding company

Capital gains on sale

If the founder later sells the operating company, selling shares held through a holdingselskab can qualify for the participation exemption on capital gains — meaning the gain is tax-free at the corporate level. The founder then pays 27%/42% dividend tax when extracting the proceeds, but timing and structuring give significant flexibility.

The holdingselskab requires an additional set of accounts, a second CVR registration, and modest ongoing accounting costs, but for any ApS with retained profits above DKK 200,000-300,000, the structure typically pays for itself within a year.

Finn handles Danish accounting

AccountsOS supports Danish ApS companies natively, with Finn — your AI accountant — trained on Danish tax law, selskabsskat rules, moms filing requirements, and Bogføringsloven compliance.

From a single dashboard at accounts-os.com/dk, you can:

• Track moms in real time: every transaction categorised with the right moms treatment, so your biannual or quarterly return is a review, not a calculation exercise
• Model salary vs dividend splits: ask Finn "what's the most tax-efficient way to take DKK 800,000 out of my ApS this year?" and get a worked answer based on your actual profit
• Stay on top of deadlines: acontoskat dates, moms return deadlines, and the årsrapport filing date are all tracked and flagged in advance
• Prepare for Bogføringsloven compliance: AccountsOS is a digital accounting system that meets the 2026 requirement, with SAF-T export capability
• File multi-country companies: if your ApS group includes UK, German, Irish or other entities, one AccountsOS login handles all of them with the right local rules in each

Finn speaks plain English and Danish. Ask your question, get a sourced answer — with the relevant section of skatteministeriet.dk or virk.dk cited so you can verify it yourself.

For more on specific Danish tax terms, see our glossary: selskabsskat and moms.

Key numbers to remember

Frequently asked questions

Does an ApS have to have a physical address in Denmark?

Yes. An ApS must have a registered address (hjemstedsadresse) in Denmark. This can be a home address, a rented office, or a registered agent service. The address is publicly listed in Erhvervsstyrelsen's CVR register.

What is the minimum share capital for a Danish ApS?

DKK 40,000. It can be contributed in cash or in kind, and it must be fully paid up before registration. There is no par value requirement for individual shares, but the total must reach DKK 40,000.

Can a foreign founder own a Danish ApS?

Yes. There is no nationality or residency requirement for ApS ownership. However, the company must still have a registered Danish address, and at least one member of the board (bestyrelse) or the director (direktør) must be resident in an EEA country, unless an exemption applies.

Is there a Danish equivalent of the UK's entrepreneur's relief on a company sale?

Not in the same form. Denmark does not have a specific entrepreneurs' relief with a lower capital gains rate. However, shares held through a holdingselskab and qualifying for the participation exemption can be sold at the corporate level tax-free, with personal-level tax only arising on extraction — which provides significant timing control.

Are dividends paid to a foreign shareholder subject to withholding tax?

Yes. Denmark withholds 27% udbytteskat on dividends paid to non-residents, unless a tax treaty reduces this rate. The Denmark-UK tax treaty reduces the withholding rate to 15% (or 0% in some cases for corporate shareholders). EU parent-subsidiary directive may exempt withholding altogether for qualifying EU corporate shareholders owning at least 10%.

What is the difference between an ApS and an A/S?

Both are limited liability entities. An ApS (anpartsselskab) is the private limited company — minimum DKK 40,000 share capital, shares cannot be publicly traded. An A/S (aktieselskab) is the public limited company — minimum DKK 400,000 share capital, shares can be listed on a stock exchange. The vast majority of Danish SME founders incorporate as ApS.

Does Denmark have any tax on retained profits inside an ApS?

No. Once selskabsskat has been paid on the profit, the after-tax amount can sit in the ApS indefinitely with no further annual tax. This is the basis for the holdingselskab retention strategy: capital grows at corporate-tax rates (22%) rather than being extracted and taxed at personal rates.