If you want to report dividends or dividend tax in E-tax for businesses (TastSelv Erhverv), it is important to know whether or not the securities are managed by VP Securities (Værdipapircentralen).

If the securities are not managed by VP Securities, you have to report:

• Danish and non-Danish recipients of dividends
• received distributed dividends
• any withheld dividend tax
• a statement of dividends in E-tax for business (this only applies if the company/association owns own shares, see below).

Next, distributed dividends and any withheld dividend tax are automatically added up for each recipient of dividends. In ‘Oversigt Udbytteskat’ (Overview of dividend tax) you can check if the information is correct. Any withheld dividend tax is payable to the Tax Agency (Skattestyrelsen). See deadlines below.

Please note that you should not make a statement of dividends in E-tax for businesses, unless the company/association owns own shares. In that case, you should only make a statement of dividends for the part of the distributed dividends that relates to own shares.

If the securities are managed by VP Securities, you have to:

• make a statement of dividends in E-tax for businesses including the total distributed dividends and any withheld dividend tax etc. (information about the recipients of dividends will be reported via one of E-capital’s online solutions and the company has to calculate the total dividends and any withheld dividend tax).

Find the tax withholding rate

If you are unsure of which tax withholding rate to apply, you can call us on (+45) 72 22 28 82 or by writing to us by means of the contact form at www.skat.dk/english

You can also search the tax withholding rate for the relevant conmapny, foundation or association to receive dividend.

Search withholding tax rate (click top right-hand corner for English).

Companies and associations etc. distributing dividends should not withhold dividend tax if the shareholder provides a valid dividend tax-exemption card or is registered in the database of the Tax Agency.

If the shares are registered with VP Securities (Værdipapircentralen) via a custody account in a Danish bank, the dividend tax-exemption card should be presented to the custodian bank. In other cases, the dividend tax-exemption card should be presented to the company or association distributing the dividend.

A non-Danish association can be issued with a temporary approval of transparency. This means that the association is then exempted from paying tax on dividends from non-Danish companies, associations, etc. Instead, the members become directly subject to tax on income made by the association.

Since there is no legal basis for not withholding dividend tax when dividend from Danish companies, associations, etc. is distributed, a dividend tax of 27% is withheld. (See below for how members may claim a refund for any overpaid divided tax).

Who can apply for a temporary approval of transparency - and how?

A non-Danish association that would be covered by section 1(1) para (6) of the Danish Corporation Tax Act (Selskabsskatteloven) if its domicile was in Denmark, and which can therefore be equated to a Danish account-holding investment fund, can apply for a temporary approval of transparency with the Danish Tax Agency.

Approvals are valid for a maximum of one year.

Please note that if the circumstances of the association change, this must be reported to the Danish Tax Agency and the approval must be returned.

The rules stipulating who can apply for a temporary approval of transparency appear from section 2(12) paras (1-5) of the Danish Corporation Tax Act, which is available in Danish here: The Corporation Tax Act (retsinfo.dk).

Applications for a temporary approval should be submitted digitally via our website.
Complete and submit: Apply for a temporary approval of transparency.

Members may claim a refund for any overpaid divided tax

Members of a non-Danish association with a temporary approval may claim a refund of dividend tax if the dividend tax withheld exceeds the final dividend tax according to a double taxation agreement. When applying for a refund, the temporary approval of transparency must be submitted as documentation that the member is entitled to claim a refund.

You can read more on our page about refund of dividend tax.

Generally, the withholding rate is 27% and it may not be reduced before we have given our approval

Principal shareholders subject to limited tax liability may be granted net withholding on dividend tax when they receive their dividends, see the Danish-language Executive Order on withholding of dividend tax and royalty tax (retsinformation.dk) and Acceptance of netwithholding of dividend tax - guidelines.

Approval of net withholding means that the withholding rate is reduced in accordance with the rules of the double taxation agreement. See also section C.F.8.2.2.10.3.2 The right of taxation of the country where the distributing company is domiciled (source country) of our Danish-language legal guide .

The distributing company is responsibility for making sure that conditions for such approval is met. If the distributing company disregard this obligation, section 69 of the Danish Withholding Tax Act applies.

Who can apply for net withholding of tax?

The distributing company which has to be a registered Danish limited company (aktieselskab) or a private limited company (anpartsselskab) may apply for net withholding.

The following conditions must be met for a company to be granted net withholding:

• The recipient of dividend should be subject to section 2(1) para (6) of the Withholding Tax Act meaning a taxable natural person domiciled in a non-Danish state, the Faroe Islands or Greenland with which Denmark has entered into a double taxation agreement.
• The recipient of dividend must be principal shareholder of the distributing company.
• Documentation should be submitted stating in which country the dividend recipient is domiciled (declaration of domicile).

The approval of net withholding may be granted for a period of up to 5 years starting at the time the approval is granted.

How to apply

The distributing company may apply via the contact form at skat.dk/tastselverhverv. (Please be aware the site is in Danish).

1. Go go www.skat.dk/tastselv
2. Log on
3. Select ‘Kontakt’ (Contact)
4. Select ‘Skriv til os’ (Write to us) and type your message
5. Attach company information including CVR no. (Business registration no.), the owner’s share percentage and the declaration of domicile from the country where the principal shareholder is domiciled for tax purposes.
6. Click ‘Send’.

If the conditions for net withholding are no longer met 

The distributing company must inform us if the conditions for net withholding changes and are no longer met. This could be:

• if the recipient of dividend is no longer the principal shareholder or has moved to another country
• if the double taxation agreement is cancelled
• if the distributing company is liquidated, wound up or becomes domiciled for tax purposes outside Denmark.

According to section 210 of the Danish Companies Act (Selskabsloven), a company may provide loans to shareholders. This applies to loans to shareholders and members of management established on 1 January 2017 or later.

When a company provides a loan to a shareholder (natural person with a controlling interest in the company) the loan is subject to section 16E of the Danish Tax Assessment Act (Ligningsloven), see section C.B.3.5.3.3. Aktionærlån in Danish in our legal guide at www.skat.dk. This means that the shareholder is taxed on the loan as if it was salary or dividend. Taxation of the loan applies irrespective of whether the loan is legal or illegal according to company law and whether the shareholder repays the loan to the company.

If the loan is taxed as salary (A-income):

• When the loan is established, the company should report the amount of the loan in E-tax for business →e-Income in field 13 ‘AM-bidragspligtig A-indkomst’ (A-income subject to Labour market contribution).
• The loan amount may be reported in E-tax for business even if the reporting deadline has expired.

If the loan is taxed as dividend:

• When the loan is established, the company should withhold dividend tax at a rate of 27%.
• The company should declare dividends and dividend tax in E-tax for businesses. When the company reports information about the recipient of dividends and declares dividend tax withheld, it should state the date when the shareholder became entitled to take out the loan as the date of approval.
• See the deadline for declaring and paying dividend tax in connection with loans to shareholders under ‘Payment and deadlines’. The loan amount can be reported in E-tax for business even if the reporting deadline has expired.
• In E-tax for companies, the company should also report the amount of the loan in field 37 in the tax return along with other possible dividend distributions.  

You can pay dividend tax using online banking. If you choose to do so, you should use the payment ID stated at ‘Oversigt udbytteskat’ (Overview Dividend tax). You can also find the payment ID in your tax account in E-tax for businesses.

Paying from a non-Danish bank account

If you pay from a non-Danish bank account, you should use the following IBAN no., BIC/SWIFT code and account number:

Please remember to enter your SE no. (VAT no.) in the comment field.

This applies, for example, if your company does not have an address in Denmark or a representative living in Denmark.

Payment deadlines

The deadline for dividend tax payments is the 10^th of the month after the month when the distribution was approved.

However, in January the deadline is the 17^th.

If the final due date is a Saturday, Sunday or a public holiday, the deadline is the following working day.

If the company’s deadline for payment of A-tax (tax withheld at source) is the last business day of the month, the deadline for declaring and paying dividend tax is the last business day of the month after the month when the distribution was approved.

Shareholders can claim refund of dividend tax if the dividend tax withheld exceeds the final dividend tax according to a double taxation agreement or current Danish tax law.

You can make the claim online. In order to make such a claim, the shareholder must be liable to pay tax abroad or be exempt from tax in Denmark. Shareholders or agents (on behalf of shareholders) can make claims.

Click here for further information and to make a claim for refund of dividend tax

Status on your claim

When you claim refund of Danish dividend tax, you get a receipt to document that you have submitted your claim. This has been the case since 1 January 2016.

We have now sent a letter to everybody who submitted a claim before 31 December 2019 and who has not yet had their claim processed. In the letter, we state the expected processing time to further 18 months.

Please call us on ( 45) 72 38 00 81 between 09.00 - 14.00 if you have not received such a letter. It could be that we do not have all the required information about you to complete the processing of your claim. In order to speed up the processing, please state when you submitted your claim and anything else that may help us identify your application.

Refund of dividend tax from 2015

Since August 2015, all claims for refunds of dividend tax have been put on hold because of the alleged criminal offences related to such claims. Read more about the background to this decision (only available in Danish). 

On 17 March 2016, we resumed payment of refunds of dividend tax, provided supporting documentation is submitted.

Please note that increased case processing time should still be expected. 
 
We regret any inconvenience this may have caused and we apologise for continued delays in the period ahead. According to section 69B of the Danish Withholding Tax Act (Kildeskatteloven), the Danish Tax Agency (Skattestyrelsen) has to pay interest on overdue refunds if case-processing time exceeds six months and the delay is due to circumstances which are not the fault of the recipient of the refund. Th Danish Tax Agency will pay any interest on overdue refunds if the conditions for this are met. You do not have to submit a claim for this interest.