Global Property Guide

Financial Information for Residential Property Buyers


Living There

Last Updated: July 20, 2018

INDIVIDUAL TAXATION

Danish residents are taxed on their worldwide income. Foreign individuals become residents if they reside in the country for more than 180 days.

Married couples are taxed jointly but they have to prepare separate tax returns. Residents are entitled to certain allowances and deductions.

INCOME TAX

Denmark properties for sale

There are four categories of income in Denmark: (1) personal income, (2) capital income, (3) income from shares, and (4) CFC income. Residents are taxable on almost all kinds of income, and taxable income is generally an aggregate of personal and capital income. The taxable income is computed as gross income less allowances and deductions.

Taxable income is taxed at various progressive rates, up to around 55.60%. Tax on income consists of state tax, AM tax municipal tax, and church tax.

State Income Tax

State income tax is imposed at progressive rates. It is levied on the computed taxable income, which is the aggregate of personal and capital income.

STATE INCOME 2017

TAXABLE INCOME, DKK (€) TAX RATE
Up to 48,913 (€6,574) 0%
48,913 - 521,304 (€70,068) 8%
Over 521,304 (€70,068) 15%
Source: Global Property Guide

STATE INCOME 2016

TAXABLE INCOME, DKK (€) TAX RATE
Up to 47,826 (€6,428) 0%
47,826 - 507,935 (€68,271) 8%
Over 507,935 (€68,271) 15%
Source: Global Property Guide

STATE INCOME 2015

TAXABLE INCOME, DKK (€) TAX RATE
Up to 47,174 (€6,341) 0%
47,174 - 499,130 (€67,087) 8.08%
Over 499,130 (€67,087) 15%
Source: Global Property Guide

RENTAL INCOME
The taxable rental income can be computed in two ways:

  • Income less related costs such as maintenance costs, depreciation and property taxes
  • Income less an allowance of DKK7,000 (€941); 40% of the result is deducted in lieu of all deductions and costs

The resulting taxable income is then taxed at progressive rates.

CAPITAL GAINS
Capital gains are included in the computation for the aggregate taxable income as capital income, and are taxed at progressive rates.

According to the detached house rule, profits from selling residential properties measuring less than 1,400 sq m and has served as the owner´s primary residence either fully or partially throughout the ownership period are exempt from taxation.

AM Tax

The AM tax is levied at a flat rate of 8%. The AM tax is calculated and deducted before calculating the other taxes.

Municipal Income Tax

Municipal income tax is levied on taxable income and varies according to the municipality, between 22.50% and 27.80%. In Copenhagen, the country´s capital, the municipal tax rate is 24%.

Health Care Tax

The health care tax is charged at a flat rate of 4% of the taxable income.

Church Tax

A church tax is also being levied on taxable income, but this only applies to members of the Danish State Church. The rate varies from municipality to municipality, ranging from 0.39% to 1.30%.

PROPERTY TAX

National Property Tax

The tax rate is 1% of the taxable value up to DKK3,040,000 (€406,961) and 3% on the value in excess of the limit.

  1. the assessed value as of 01 January of the current tax year;
  2. 105% of the assessed value as of 01 January 2001;
  3. the assessed value as of 01 January 2002.

The tax rate is 1% of the taxable value up to DKK3,040,000 (€408,602) and 3% on the value in excess of the limit.

NATIONAL PROPERTY TAX

PROPERTY VALUE, DKK (€) TAX RATE
Up to 3,040,000 (€408,602) 1%
Over 3,040,000 (€408,602) 3%

If the property was acquired before 01 July 1988, the applicable rates are generally reduced to 0.5% and 2.8% respectively.

Municipal Real Estate Tax

The municipal real estate tax rate is levied on the land value. The tax rate is between 1.6% and 3.4%, varying depending on the location.

CORPORATE TAXATION

INCOME TAX

A flat rate of 22% is imposed on the income and capital gains earned by a corporation. Business-related expenses, depreciation and interest payments are deductible from the gross income. No local taxes are levied on corporate income.

 

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