Selskabsskat

Selskabsskat, or corporate income tax, is the Danish tax levied on the profits of Danish-registered companies and on permanent establishments of foreign companies operating in Denmark. The standard rate is 22 percent on taxable profits. The tax is administered by the Danish Tax Agency and applies to both resident companies’ worldwide income and non-resident entities’ Danish-sourced income.

The tax base is determined under Danish tax law and is based on the company’s accounting profit adjusted for tax purposes. This includes adding back non-deductible costs and accounting adjustments, and applying allowable deductions, depreciation, and special allowances. Losses can typically be carried forward to offset future profits, subject to applicable rules and limits. Certain financial items, incentives, and reliefs can affect the final tax liability, such as exemptions or reductions for specific activities or investments.

Residence and source rules determine which entities are taxed in Denmark and to what extent. Danish-resident companies are taxed on their worldwide income, while non-residents are taxed on Danish-sourced income and on income attributable to a Danish permanent establishment. International considerations include relief against double taxation through relief methods provided in Denmark’s tax treaties and domestic rules.

Administration and payment involve quarterly or monthly preliminary tax payments based on expected profits, with a final assessment after the financial year-end. Companies file a corporate tax return with the Danish Tax Agency, and the final tax liability is settled through the annual tax assessment. Withholding taxes may apply to certain payments to non-residents under Danish law and treaty-based reliefs.