Denmark Accounting & Tax Glossary

Danish labour market contribution of 8% on all employment and self-employment income. Deducted by employers before personal income tax is calculated. For self-employed, paid quarterly or via preliminary tax. Deductible against gross income for income tax purposes.

ApS is Denmark's private limited company, requiring DKK 40,000 minimum share capital. Most common structure for small businesses after capital requirement was reduced from DKK 125,000 in 2019. A/S is the public limited company form requiring DKK 400,000 capital.

Danish company governance structure. ApS requires a direktion (at least one director). A/S requires both bestyrelse (board of directors, minimum 3 members) and direktion. Directors are personally liable for tax obligations and can face personal claims if company taxes are not paid.

Danish holding company structure where a parent ApS/A/S owns shares in operating subsidiaries. Dividends paid up from operating company to holding company are typically tax-exempt under the participation exemption, enabling tax-efficient profit accumulation and reinvestment.

Danish Business Authority — the company registry for Denmark. All companies must register here to receive a CVR number. Annual accounts (årsrapport) are filed here. Public register of companies, directors, beneficial owners, and financial accounts.

Danish personal income tax, among the highest in the world. Up to 55.9% marginal rate on personal income above DKK 568,900 (2025), comprising municipal tax (~25%), state taxes (bottom and top bracket), and the 8% AM-bidrag labour market contribution.

Simpler alternative to VSO for Danish sole traders. Splits business income into a capital return (taxed at capital income rates, approximately 42%) and labour income. No strict bank-account separation required. Lower benefit than VSO but far simpler to administer.

Danish VAT at 25%, the highest standard rate in the EU. Unlike most EU member states, Denmark has no reduced rate — virtually all supplies are either 25% or zero-rated/exempt. Registration threshold is DKK 50,000 annual taxable turnover.

Danish corporate income tax at a flat 22% rate on taxable profits of resident companies (ApS, A/S). No progressive thresholds. Paid via TastSelv Erhverv to Skat.dk. Applies to worldwide income of Danish-resident entities.

Special Danish tax scheme for sole traders that allows business income retained in the business to be taxed at the 22% corporate rate rather than the personal top rate (up to 55.9%). Requires strict bookkeeping separation of personal and business finances.

Danish VAT filing periods determined by annual turnover. Semi-annual below DKK 5m, quarterly for DKK 5-50m, monthly above DKK 50m. All filed via TastSelv Erhverv (skat.dk business portal).

The Danish Tax Authority (Skatteforvaltningen), commonly called SKAT, administers all Danish taxes including income tax, moms, corporate tax, and customs. Primary business portal is TastSelv Erhverv at skat.dk.