Accounting & Tax Compliance in Denmark

Statutory accounts, VAT returns, and corporate tax filings aligned with Danish accounting standards, including mandatory digital bookkeeping compliance from 2026.

Denmark Reviewed September 2026

Currency

DKK (Danish krone)

Corporate tax rate

22% flat rate (26% for financial sector entities)

VAT standard rate

25%

Legal forms

ApS · A/S

Bookkeeping standard

Danish Financial Statements Act (Årsregnskabsloven), or IFRS for large groups

Annual filing

Annual report filed with the Danish Business Authority within 5 months of year-end

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How accounting and tax compliance work in Denmark

Denmark applies a flat 22% corporate tax rate uniformly across most company sizes and sectors, with no reduced rate for small businesses and no municipal or regional surcharge layered on top — one of the more straightforward corporate tax structures in Europe. The ApS, Denmark's standard private limited company, requires DKK 20,000 in share capital and can be formed with 100% foreign ownership and no requirement for directors or shareholders to be Danish tax residents.

Operating in Denmark combines one of Europe's simplest corporate tax structures with a personal income tax system that is comparatively complex and, as of 2026, has introduced a new top bracket specifically targeting the highest earners.

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Rate structure and what it applies to

22% flat rate (26% for financial sector entities)

Fixed-amount employer social contributions — (ATP, accident insurance) rather than percentage-based, changing total cost modelling at higher salary levels
New "top-top tax" — — a 5% additional bracket on personal income above DKK 2,592,700, effective January 2026, raising the maximum marginal rate to approximately 60.5%
Reduced researcher/key employee tax scheme threshold — — minimum qualifying monthly salary lowered to DKK 65,400 from January 2026, easing access to the 27% flat-rate regime
Mandatory digital bookkeeping — for companies exceeding DKK 300,000 turnover, phased in from financial years starting after 1 January 2026

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Rates that apply in Denmark

Rate	Applies to
25%	Standard rate — most goods and services
None — Denmark applies a single VAT rate with no reduced rate	Reduced rate(s) — defined categories of goods and services

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Danish Financial Statements Act (Årsregnskabsloven), or IFRS for large groups, and when an audit is required

Statutory bookkeeping in Denmark follows Danish Financial Statements Act (Årsregnskabsloven), or IFRS for large groups. Statutory audit mandatory above 2 of 3 thresholds: €5.5M balance sheet, €11M turnover, 50 employees — aligned with EU harmonized thresholds; many small ApS companies opt out below this.

Confirm your audit obligation

Annual accounts and registration

Annual report filed with the Danish Business Authority within 5 months of year-end.

Entity registration runs through the Danish Business Authority (Erhvervsstyrelsen), typically taking As little as a few business days for a standard ApS.

Plan your filing calendar

Frequently asked questions

Why are Danish employer social contributions a fixed amount rather than a percentage?

Denmark's employer-side social contributions are primarily the ATP pension contribution and mandatory workplace accident insurance, both calculated as fixed annual amounts per full-time employee rather than as a percentage of salary — totalling approximately DKK 16,000 per year. This means employer cost does not scale with salary the way it does in percentage-based systems, making Denmark comparatively favourable for higher-salary roles.

What is the researcher and key employee tax scheme?

Qualifying foreign researchers and highly paid key employees can opt for a flat 27% tax rate on cash remuneration (effectively 32.84% combined with the labour market contribution) for up to seven years, instead of Denmark's standard progressive income tax. As of January 2026, the minimum qualifying monthly salary was reduced to DKK 65,400, down from DKK 78,000, making the scheme accessible to a wider range of foreign specialists.

What is the new "top-top tax" introduced in 2026?

Effective 1 January 2026, Denmark introduced an additional 5% tax bracket on personal income exceeding DKK 2,592,700 annually (after labour market contribution), bringing the maximum marginal rate for the highest earners to approximately 60.5% when combined with state and municipal tax.

What is the difference between an ApS and an A/S?

An ApS requires DKK 20,000 in share capital and suits the vast majority of foreign company formations, with no requirement for Danish-resident directors or shareholders. An A/S requires DKK 400,000 and a more formal governance structure, typically used for larger enterprises planning to raise capital publicly.

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The fixed, per-employee nature of Danish employer social contributions is frequently misunderstood by companies importing payroll cost assumptions from percentage-based systems elsewhere in Europe. At higher salary levels, Denmark's employer cost can be materially lower in relative terms than markets with uncapped percentage contributions — a structural advantage that is easy to miss when budgeting from a generic European cost template.

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