Denmark’s Parliament passed Bill No. L 28 on 19 December 2024, introducing changes to the country’s tax laws, including updates to the taxation of dividends paid to resident and non-resident companies, effective from 1 January 2025.
The new rules will generally not affect foreign multinational groups with Danish subsidiaries. Dividends paid by a Danish subsidiary to a non-resident parent company will remain exempt from Danish taxes if the parent is based in the EU or a tax-treaty country and is the beneficial owner.
However, if the Danish subsidiary owns a foreign subsidiary and redistributes dividends from it to the non-resident parent, these dividends may be taxable in Denmark if they lead to tax savings for the group. It’s recommended that companies review their structures to avoid triggering unintended taxes.
For foreign investors in Danish-listed companies, the changes are typically minimal. However, if an investor is not the beneficial owner of the dividend, or if they reside in a non-treaty country outside the EU and have significant influence over the company, Danish taxes could increase from 15% to 22%.
Foreign investors in non-listed Danish companies will see more noticeable changes. Investors from the EU or tax-treaty countries will benefit from a reduced tax rate of 0%, provided they are the beneficial owner of the dividend.
Non-treaty investors outside the EU will also see their tax rate reduced to 0%, but only if they don’t have decisive influence over the company. If this condition isn’t met, taxes could rise from 15% to 22%.
