What is the corporate tax rate in Denmark?

## What Is the Danish Corporate Tax Rate?\n\nDenmark levies selskabsskat (corporate income tax) at a flat rate of 22% on the taxable profits of resident companies. This rate has been unchanged since 2016 and applies to all corporate entities: ApS (Anpartsselskab), A/S (Aktieselskab), and other legal entities subject to corporate tax.\n\nThere are no progressive thresholds, no small company reliefs, and no exemptions for retained earnings below a certain amount. Every krone of taxable profit is subject to the same 22% rate.\n\n## How Danish Corporate Tax Compares\n\nAt 22%, Denmark sits in the middle of the European corporate tax landscape:\n\n| Country | Corporate Tax Rate |\n|---------|-------------------|\n| Ireland | 12.5% |\n| Netherlands | 19%/25.8% |\n| Denmark | 22% |\n| Germany | ~30% (combined) |\n| France | 25% |\n| UK | 25% |\n\nDenmark's 22% rate is competitive among Nordic countries (Norway: 22%, Sweden: 20.6%, Finland: 20%), but Danish personal income tax is much higher (up to 55.9%), which is why corporate tax planning focuses heavily on the rate differential between corporate and personal rates.\n\n## Corporate Tax vs Personal Income Tax\n\nThe most important dynamic in Danish business taxation is the gap between the 22% corporate rate and the up to 55.9% personal marginal rate. This creates a powerful incentive structure:\n\n- Retained inside a company

taxed at 22%\n- **Extracted as salary**: up to 55.9% marginal rate\n- **Extracted as dividends**: 27% (below DKK 61,000) or 42% above\n\nFor an owner-manager earning DKK 2,000,000 in business profit, retaining DKK 1,000,000 inside the company costs DKK 220,000 in tax, leaving DKK 780,000 to invest. Taking the same amount as salary would cost approximately DKK 550,000, leaving DKK 450,000 net — a difference of DKK 330,000 on the same income.\n\n## The Participation Exemption (Datterselskabsudbytter)\n\nOne of the most important features of Danish corporate tax is the **participation exemption**: dividends paid from one company to another that owns 10% or more of the paying company are fully exempt from corporate tax in the receiving company.\n\nThis makes the **holdingselskab (holding company) structure** exceptionally tax-efficient:\n\n1. The operating ApS earns DKK 2,000,000\n2. Pays 22% selskabsskat (DKK 440,000)\n3. Pays DKK 1,560,000 dividend to the holding ApS — **zero tax on this dividend**\n4. The holding ApS can now reinvest or make further acquisitions at the corporate rate\n\nThe same participation exemption applies to capital gains: if the holding ApS later sells shares in the operating ApS (held for 3+ years at 10%+), the gain is typically tax-exempt under the Danish participation exemption rules.\n\n## Acontoskat (Advance Tax Instalments)\n\nDanish companies pay their corporate tax in advance through two acontoskat instalments:\n\n- **20 March**: first instalment (typically 50% of expected full-year liability)\n- **20 November**: second instalment (remainder of expected liability)\n\nA voluntary third instalment can be made by 1 February of the following year to avoid the procenttillæg (interest supplement) on any underpayment.\n\nSKAT suggests default instalment amounts based on the prior year's final tax, but companies should actively forecast and adjust — underpaying generates interest costs, while significantly overpaying creates an unnecessary cash-flow cost.\n\n## Sambeskatning (Group Taxation)\n\nAll Danish companies in the same group (50%+ ownership) are automatically included in **mandatory sambeskatning** (joint taxation). This means losses in one group company offset profits in another, reducing the overall group tax liability. Losses are allocated by the administrative management company (administrationsselskab).\n\nGroups can also elect international sambeskatning, bringing all foreign subsidiaries into the Danish tax base. This is a 10-year lock-in election and requires expert advice before making it.\n\n## Minimum Tax (Pillar Two)\n\nFor Danish companies that are part of multinational groups with consolidated annual revenue of EUR 750m or more, Denmark has implemented the OECD Pillar Two global minimum tax of 15%. The Danish implementation (the Minimum Tax Act) came into force from 1 January 2024. Most Danish SMEs are below this threshold and unaffected.