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Business can be conducted through companies, by partnerships or by individuals acting as sole traders.
The board of directors and the managing director are responsible for the maintenance of sound accounting records and for the preparation of annual reports, covering each financial reference period.
All limited companies must be audited by an independent auditor (in certain cases very small companies may be exempted). The auditor is appointed by the shareholders at the general meeting.
When doing business in Denmark, bookkeeping must be made in accordance with the Danish Bookkeeping Act.
A foreign investor planning to set up a subsidiary in Denmark may either form a new company or purchase the shares in an existing company (“shelf” company).
Taxable income – including capital gains – is subject to a corporate tax of 22 %. The tax rate is identical for public limited companies, private limited companies and branches.
Calculation of the taxable income
The taxable income is determined on the basis of the result shown in the statutory annual report adjusted to comply with the prevailing tax provisions.
Taxation of individuals
Danish tax legislation distinguishes between full tax-liability for resident individuals and limited tax liability for nonresident.
Denmark applies the system of value-added tax (VAT) established by the EU. Denmark imposes VAT on imports and taxable deliveries of goods and services – unless specially exempted – at a standard rate of 25 %.
Withholding taxes. Denmark versus other countries.
Planning to set up a new business in Denmark?
Denmark is a complex country to set up a new business.
Are you actually planning to set up a new business in Denmark, we recommend further professional assistance.
We can help you from day one.