Denmark is one of the countries in Europe with a substantial tax burden on individuals and a corporate income tax rate that has been reduced. However, this is about to change, as envisioned by the country’s tax authorities. In a recent statement made in anticipation of the release of Tax Economics Report by the Government, the country’s Tax Minister said that the tax burden will continue on a downward trend, to the benefit of companies and individuals alike.

 

One of the plans included in the coalition agreement presented in February this year stated that the taxes on labor will be reduced and that the deductions for pension contributions will be increased. Government officials have said that lowering the tax burden will continue to be the foundation of the current tax policy.

 

 

Denmark, along with Belgium and Germany, is one of the European countries with the highest average personal income tax. Today, the individuals who derive income from the country are taxed at an effective rate that can reach up to 55.8% (no church tax included). The personal income taxation scheme includes the AM tax, the municipal tax, church tax, and state tax. The Government has yet to say which one of these taxes will be cut or how the promised tax burden reduction for individuals will take place.

 

Denmark has taken steps in reducing its hefty taxes and one example is the corporate income tax. The current tax on company income is 22%, with a higher tax for companies in the gas and oil industry, at 25%.

 

Our team of Danish lawyers can give you more details on the taxation regime.

 

Contact us if for more information about the taxes and the conditions for doing business.