Dividends from shares in Danish companies are also liable to taxation in Denmark. A dividend tax of 27% is generally withheld. In accordance with the Nordic double-taxation treaty, Denmark is only entitled to withhold 15% as dividend tax.
How does Denmark treat dividend income?
For individuals resident in Denmark, received dividends are included in a special share income that is taxed at 27% of the first DKK 56,500 (2021) of share income and at 42% for the rest. Interest and royalties are included in the person’s taxable income and are taxed in line with other taxable income.
Is there a withholding tax on dividends in Denmark?
On 18 May 2020, the Danish Government published an agreement (the Agreement) between the Danish Ministry of Taxation and Finance Denmark (the Danish business association for the banking industry) on a new withholding tax on dividends regime.
When did CJEU rule on Danish withholding tax?
On 26 February 2019, the Court of Justice of the European Union (CJEU) decided several cases dealing with Danish withholding tax on dividends and interest paid by Danish companies to companies in other Member States. 1 With respect to withholding tax on dividend distributions, the CJEU issued decisions in two cases.
Why was Danish tax refund suspended in 2015?
In August 2015, the Danish Tax Authorities suspended the processing of all dividend WHT refund claims with immediate effect due to alleged dividend reclaim tax fraud of approximately DKK12.7 billion.
How do you get a tax refund in Denmark?
Nonresidents subject to a lower tax rate under a double taxation treaty or Danish domestic law are eligible for reclaim of excess WHT through the filing of a refund application with the Danish tax authorities. Applying for a refund requires the shareholder to provide the tax authorities with relevant documentation after the dividend distribution.
