Danish Withholding Taxes -Outbound payments

• Dividends
• Royalties
• Interest payments to certain affiliated companies

Outbound dividends

Payments of dividends from Danish companies to foreign recipients are subject to Danish withholding tax. The withholding tax rate is generally 27 % for individuals.

However, if the dividends are paid to a foreign corporate entity which is entitled to reduction or elimination of Danish withholding tax pursuant to a tax treaty with Denmark or the EU parent/subsidiary directive, Danish withholding tax will not apply. It is noted that in determining whether a foreign parent company is entitled to claim such reduction, a very strict test of beneficial ownership and test of abuse of tax treaty rights is applied which in a number ofsituations has led to a denial of tax treaty or EU tax directive benefits, cf. below.

As of 2025, dividend paid on certain shareholdings which constitute less than 10% of the nominal share capital (shares qualifying as so-called tax-exempt portfolio shares) can also under certain circumstances qualify for dividend withholding tax exemption.

With regard tooutbound dividends to other shareholders, the Danish company is obliged to withhold and pay 27 % in withholding tax to the Danish Tax Authorities. This applies even if the recipient is a person or company where the Danish tax on dividend is to be reduced pursuant to a tax treaty. The shareholder can in this case claim a refund of the excess withheld tax by the Danish Tax Authorities.


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