What is Selskabsskat (Corporate Income Tax)?

Selskabsskat is levied at 22% on a Danish company's taxable profit, which is accounting profit adjusted for non-deductible items, depreciation differences, and any group relief. The flat rate has been stable since 2016 and applies equally to small sole-person ApS entities and large multinational subsidiaries.\n\nDanmark uses a classical system: the company pays 22% on profits, then distributes net-of-tax dividends to shareholders who pay a further 27% (below DKK 61,000 threshold) or 42% on dividend income. This double-taxation creates a strong incentive for owner-managed businesses to retain profits inside a holding company structure and extract via tax-exempt inter-company dividends.\n\nFiling: The selskabsskat return is filed electronically via TastSelv Erhverv. For calendar-year companies the deadline is 30 June (six months after year-end). Companies with non-calendar fiscal years have until the end of the sixth month after their year-end, with a maximum extension to 30 September.\n\nAdvance payments (acontoskat): Companies pay 50% of expected tax on 20 March and 20 November during the income year. Underpayment after the November instalment triggers interest charges (procenttillæg). Overpayments are refunded with a small interest allowance. Accurate profit forecasting reduces unnecessary cash outflows on the March instalment.\n\nGroup companies can achieve a form of group relief via the Danish sambeskatning (joint taxation) rules, which require all Danish group companies (and certain foreign subsidiaries) to be included in a joint return. Losses in one entity offset profits in another, reducing overall group tax liability. International joint taxation is elective and locks in all foreign subsidiaries for ten years.\n\nTransfer pricing: Related-party transactions must be at arm's length. Danish companies above DKK 5m of controlled transactions must maintain contemporaneous TP documentation and file a TP declaration with the corporate return.