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Denmark

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Buying a European shelf company with VAT number

Whenever you need to start doing business immediately in a European country and you need a company with a VAT number, you don’t have to wait for the bureaucratic procedures.

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Partner Law Firms

We encourage you to contact our partner law firms in Bucharest: Rolegal and E&C, both part of our legal network.

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Tax Minimization Structures

BridgeWest is specialized in special corporate structures designed for tax minimization. No matter where you want to incorporate your company, you will need to consider how you can legally minimize costs.

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Paying Taxes in Denmark

April 4, 2011, 4:36 pm
BridgeWest

1. What is the corporate tax in Denmark?
Companies resident in Denmark are subjected to Danish corporate tax on their profits made in Denmark and abroad, to some extent. Non-resident companies, on the other hand pay tax on the income made in Denmark. The standard corporate income tax is 25%.

2. What is the VAT in Denmark?
Danish Tax Law imposes a standard VAT rate of 25% of the price of goods and services, without any graduated rates. Certain services are exempt from VAT payments such as the education, insurance, financial activities or transportation of persons. The payment is made quarterly, except for business with an annual turnover above 1.3 million, which have to pay a VAT monthly.

3. How can the VAT be refunded in Denmark?
Danish prices include a 25% VAT which affects the profits of a company. However business entities are able to recover the VAT spent, as the tax is a transit item. In order to obtain the refund, the non EU companies must submit a refund application to the tax authorities of Denmark, including original invoices, a proof that the applicant is registered for VAT in the country of origin a statement regarding the use of objects and services for which the refund is asked, a proof that the applicant is not performing activities which requires the VAT registration. If the application is sent for the first time it should contain documentation to the effect that the business is taxable for VAT. The EU countries may apply through the online application, including a list with all the invoices.

4. What is the dividend tax in Denmark?
Under Danish Tax Law taxable entities are levied 25% withholding tax, and share dividends are taxed at 28%. If the shares are subsidiary shares (the shareholder keeps at least 10% of the share capital of the payer) or if the shareholder is from a EU/EEA country the withholding tax on dividends is exempt. Also exemptions may be granted by signed anti-avoidance treaties.
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5. What are the taxes rates applied on other payments?

The interests are royalties paid to nonresidents are subject to a 25% tax rate but certain incentives are offered too in case of existence of double tax treaties. The technical service fees are not taxed and so are the branch remittance taxes.


6. Are there any incentives for foreign investors in Denmark?

Denmark is a country worthy of foreign investment, due to a well-developed financial system and a wide range of finance sources. Companies in Denmark benefit from financial incentives and programs for funding. The Danish government encourages foreign investment by supporting fair competition within EU and free trade. Both Danish and international companies are free to apply for incentives which are mainly focused on research and development. For this field Denmark offers attractive tax rules and activities. Also preferential loans and grants are offered for companies activating in health, education and infrastructure. 

7. Why do I need a local accountant for my Danish business?

Denmark has a comprehensive financial system, with straight-forward procedures required. However, in most cases experience in dealing with state authorities is advisable if not mandatory. Therefore a local accountant is the best solution for a foreign company, that doesn't have previous experience in financial dealings in Denmark.




Open Business in Denmark
We guarantee a cost-efficient solution for full company setup, bank account and VAT registration
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