Amendments to the Danish Corporation Tax Act and the Danish Tax Assessment Act have entered into force
Published 3 January 2023
Category: Taxation / VAT
On 1 January 2023, amendments to the Danish Corporation Tax Act and the Danish Tax Assessment Act entered into force.
Following the amendments, enacted on 9 June 2022, the corporate tax rate applicable to financial companies has increased from 22 percent to 25.2 percent as per 1 January 2023 and will increase to 26 percent in 2024. The tax increase applies to authorized managers of alternative investment funds, i.e. to companies exercising activities as managers of alternative investment funds, which require an authorization from the Danish Financial Supervisory Authority (as opposed to registration).
In addition, a cap now applies to a company’s deductions for salaries and wage accessories. The cap is fixed at a basic amount corresponding to DKK 7,721,900 in 2023. The cap applies per person per income year and applies at group level. Expenses related to stock options and warrants (purchase and subscriptions rights for shares) granted to an employee subject to section 16 or 28 (as opposed to section 7 P) of the Danish Tax Assessment Act are also included in the calculation of the deductibility cap. Expenses for stock options and warrants granted subject to section 16 are deductible in the year of grant (in Danish: året for retserhvervelse) whereas expenses for stock options and warrants subject to section 28 are deductible in the year of exercise.
The amendments as enacted are available (in Danish) here.
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