Denmark’s Ministry of Taxation has published a consolidated Share Gains Tax Act incorporating recent legislative amendments and clarifying the taxation of share disposals, investment entities, gains and losses, business succession, and exit taxation.
Denmark’s Ministry of Taxation has published Executive Order No. 849/2026 on 3 October 2026, which represents the latest consolidated text of the Danish Share Gains Tax Act. Effective retroactively from 21 September 2026, this consolidation supersedes Executive Order No. 1098 of 27 August 2025.
The primary purpose of the Executive Order is to integrate Act No. 1755 of 29 December 2025, Act No. 615 of 30 June 2026, and Act No. 729 of 1 September 2026, into a unified statutory framework.
By combining these statutory modifications, Executive Order No. 849/2026 provides a comprehensive, binding guide for individuals, corporations, and institutional investors on how gains and losses on equity instruments, investment funds, and convertible securities are taxed under Danish law.
The detailed frameworks governing the three key measures highlighted in the Order are outlined below:
Scope of taxation and covered securities
The Act covers gains and losses from the disposal of various financial instruments, including shares, private company shares, cooperative share certificates, investment certificates, convertible bonds, and share or subscription rights.
Disposal events include sales, exchanges, cancellations, share repurchases, capital reductions, and liquidation distributions.
Special rules apply to principal shareholders who hold or have held at least 25% of share capital or more than 50% of voting rights within the previous five years, including ownership aggregated with close family members and controlled entities.
Tax classification of shares for corporations and individuals
The Act establishes specific share classifications that dictate whether gains/losses are taxable or tax-exempt:
- Corporate shareholders: The Act classifies shares into several categories for tax purposes. Subsidiary shares and group company shares are fully tax-exempt where the relevant ownership or group taxation conditions are met, while tax-exempt portfolio shares cover qualifying unlisted holdings of less than 10% and are also exempt. Taxable portfolio shares, including certain listed holdings below 10%, are subject to tax on gains, with losses generally deductible under specific rules. Gains and losses on treasury shares are likewise tax-exempt.
- Individual shareholders & investment entities: For individuals, gains on shares are generally taxed as share income (aktieindkomst). Investment companies are classified as equity-based or bond-based according to their asset composition, with equity-based status generally requiring at least 50% of assets to be invested in equity securities. Minimum-taxed investment institutes are similarly divided into equity-based and bond-based categories, each subject to different deduction threshold rules.
Taxation principles, loss deductions, and valuation methods
- Taxation principles for share gains and losses: The Act generally follows the realisation principle, under which gains and losses are recognised upon disposal. However, the mark-to-market (inventory) principle applies mandatorily to corporate taxable portfolio shares and holdings in qualifying investment companies. Corporations may elect the realisation principle for unlisted taxable portfolio shares or for newly listed shares for up to 7 years after initial listing.
- Valuation and cost basis methods: The Act generally uses the average method to determine gains and losses based on the shareholder’s total acquisition cost, while the FIFO principle applies when identical shares acquired at different times are disposed of. A share-by-share method specifically applies to listed subscription and share rights.
- Rules for loss deduction and carryforward: The Act provides different loss deduction rules for companies and individuals. For corporations, mark-to-market losses are generally deductible against taxable income, while realisation-based losses may only offset gains on realisation-taxed shares, with indefinite carryforward. Individuals can deduct losses on unlisted shares against general taxable income, whereas losses on listed shares are limited to share income from listed investments and may be carried forward indefinitely or transferred to a cohabiting spouse. Loss deductions for listed shares and investment certificates are also conditional on timely reporting of acquisition details to the Tax Agency.
Business succession and exit taxation provisions
The Act provides for tax-deferred business succession when shares in active businesses are transferred to qualifying close family members, key employees, commercial foundations, or employee ownership companies. It also imposes exit taxation on individuals leaving Denmark with qualifying shareholdings valued at DKK 100,000 or more, taxing unrealised gains, although taxpayers may apply for deferral through a dedicated tax deferral account.
