Denmark has implemented major tax reforms in 2024, positioning itself as an attractive destination for international companies looking to expand their operations in Europe. This article is a brief guide for businesses considering establishing themselves in this dynamic economic environment.

1. One of the most notable reforms is the reduction of the standard corporate tax rate from 22% to 21%. This measure aligns with the European Union average, increasing Denmark´s competitiveness and attracting more investments.
2. To encourage innovation, Denmark has expanded tax incentives for investments in R&D.  Deductions for R&D expenses can reach up to 130% of actual expenses, especially benefiting small and medium-sized business (SMEs). This reform simplifies access requirements, allowing more companies to take advantage of these benefits.
3. The new rules on dividend taxation avoid double taxation, benefitting parent companies that receive dividends from their foreign subsidiaries. The tax exemption has been expanded, facilitating the repatriation of profits and improving the tax structure for companies with international operations.
4. On the other hand, Denmark has tightened restricted capitalization rules. Interest deductions for companies with high financial leverage are now limited to 30% of EBITDA, forcing companies to maintain more balanced and sustainable capital structures.
5. With a strong commitment to sustainability, Denmark has introduced tax provisions to promote green business practices. Investments in green technologies and renewable energy projects enjoy additional tax credits and deductions.

Moreover it is important to detail that the progress in the digitalization of the Danish tax system facilitates the presentation of tax returns and the management of corporate taxes through electronic platforms.

In conclusion, multinational companies can significantly benefit from these reforms by optimizing their tax planning and ensuring compliance with the new regulations.

Auxadi can guide your company by helping you establish and expand your operations in Denmark. You can contact us for a personalized consultation and discover how we can assist you in your international expansion.

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.