Buying and Selling Shares in Denmark: Practical Guide

Buying and selling shares in Denmark involves specific reporting requirements to SKAT (the Danish Tax Agency). Whether you hold a Danish custody account or invest through foreign brokers, understanding your obligations ensures compliance and avoids penalties.

Danish Custody Accounts

If you hold shares through a Danish bank or broker, your institution handles most of the reporting for you. Your bank automatically reports purchases and sales to SKAT, with data submitted by 20 January of the year following the transaction.

You can verify your information in E-tax (TastSelv) under Share information. Check that reported transactions match your records before the tax assessment notice is issued in March/April.

Foreign Custody Accounts

When you hold shares through a foreign broker or bank, you are responsible for reporting purchases and sales to SKAT.

Reporting Deadline

You must report by 1 July of the year following the calendar year in which the transaction occurred.

How to Report

Submit via E-tax:

1. Log in to E-tax
2. Go to Contact → Write to us
3. Select Income and deductions → Tax assessment notice → Shares and securities
4. Report each purchase and sale with the required details

Information to Report

For each transaction, you must provide:

• Share identity: name of the share, securities code (VP-nummer), and ISIN code
• Number of shares bought or sold
• Transaction date
• Purchase price including all costs (brokerage fees, currency conversion charges, etc.)
• Sale proceeds (for sales)

Corporate Events

Corporate actions can affect your share holdings and the information SKAT holds. You should check the Securities System for updated information after any corporate event.

Events that may require your attention:

• Mergers: one share may be exchanged for shares in another company at a specific ratio
• Share splits: your number of shares increases while the price per share decreases proportionally
• Name changes: the company changes its name but the securities code remains the same
• Share exchanges: one share is exchanged for another, often as part of a restructuring

If SKAT’s records do not reflect a corporate event, contact them with documentation to ensure your acquisition price and holdings are correctly adjusted.

Company Dissolution

If a company you hold shares in is dissolved or liquidated, you must declare any gain or loss.

Reporting Gains and Losses

Declare gains or losses in box 67, field 312 of your tax return.

• Gain = disposal price (equity received in the dissolution) minus acquisition price
• Loss = acquisition price minus disposal price (equity received)

The disposal price in a dissolution is typically the equity value you receive after the company’s liabilities are settled.

Acquisition Price Calculation

The acquisition price is the cost base used to calculate gains or losses when you eventually sell or dispose of your shares.

For Founded Companies (Cash Injection)

When you found a company and inject cash as share capital:

Acquisition price = Cash amount contributed

Example: You invest DKK 100,000 in cash to establish a company. Your acquisition price is DKK 100,000.

For Purchased Companies (Shareholder Agreement)

When you buy shares from another shareholder:

Acquisition price = Purchase price paid under the shareholder agreement

Example: You buy 500 shares for DKK 250,000. Your acquisition price is DKK 250,000.

Succession (Inherited Shares)

When you inherit shares, you inherit the previous owner’s acquisition price. The acquisition price does not reset to market value at the date of inheritance.

Example: Your parent bought shares for DKK 50,000. You inherit them when they are worth DKK 120,000. Your acquisition price remains DKK 50,000.

Capital Changes During Ownership

Certain events after acquisition adjust your acquisition price.

Cash Injection

If you make an additional cash injection into a company you already own shares in:

New acquisition price = Original acquisition price + Cash injection amount

Example: Original acquisition price DKK 100,000 + additional injection DKK 40,000 = DKK 140,000.

Debt Conversion

If a debt you are owed by the company is converted into shares:

Acquisition price = Market value of the receivable at the time of conversion

Example: You are owed DKK 80,000 by the company. The debt is converted into shares when the fair market value of the receivable is DKK 80,000. Your acquisition price is DKK 80,000.

Merger

When companies merge, your acquisition price in the new entity is adjusted based on the merger terms. Check the Securities System and any merger documentation for the correct acquisition price in the surviving company.

Capital Reduction

A capital reduction (for example, a share buyback or reduction in nominal value) may reduce your number of shares or their nominal value. The effect on your acquisition price depends on the type of reduction:

• Nominal value reduction: acquisition price per share may be reduced proportionally
• Share buyback: if you sell shares back to the company, the gain or loss is calculated on those specific shares

Consult SKAT or a tax adviser if you are unsure how a capital reduction affects your position.

Worked Examples

Example 1: Simple Purchase and Sale

1. You buy 1,000 shares at DKK 150 each = DKK 150,000 (acquisition price)
2. Brokerage fee paid: DKK 1,000
3. Total acquisition price: DKK 151,000
4. You later sell all 1,000 shares at DKK 200 each = DKK 200,000
5. Brokerage fee paid: DKK 1,200
6. Net sale proceeds: DKK 198,800
7. Gain: DKK 198,800 − DKK 151,000 = DKK 47,800

Example 2: Succession and Sale

1. You inherit shares with your parent’s acquisition price of DKK 75,000
2. You sell the shares for DKK 120,000
3. Gain: DKK 120,000 − DKK 75,000 = DKK 45,000

Example 3: Cash Injection and Sale

1. Original acquisition price: DKK 200,000
2. You inject an additional DKK 50,000
3. Adjusted acquisition price: DKK 250,000
4. You sell your shares for DKK 320,000
5. Gain: DKK 320,000 − DKK 250,000 = DKK 70,000

Example 4: Company Dissolution

1. Your acquisition price for 500 shares: DKK 100,000
2. The company is dissolved and you receive DKK 35,000 in equity
3. Loss: DKK 100,000 − DKK 35,000 = DKK 65,000

Key Takeaways

• Danish custody accounts: your bank reports automatically by 20 January; verify in E-tax
• Foreign custody accounts: you must report by 1 July via E-tax
• Always include costs in your acquisition price calculation
• Check the Securities System after corporate events for updated share information
• Company dissolution: declare gains/losses in box 67, field 312
• Inherited shares retain the original owner’s acquisition price

Reference

For the official guidance from SKAT, visit: Buying and Selling Shares and Securities