If you invest in shares or receive dividends while living in Denmark, understanding the tax rules is essential. Danish share taxation has its own structure — including a two-tier rate system, average cost calculations, and specific declaration requirements. This guide walks you through everything you need to know.
Tax Rates on Shares and Dividends
Denmark applies a two-tier tax system to share income. The rate you pay depends on how much you earn from shares in a given year.
| Amount | Tax Rate |
|---|---|
| First DKK 79,400 (2026) | 27% |
| Above DKK 79,400 | 42% |
Married couples: If you are married or in a registered partnership, each spouse gets their own DKK 79,400 threshold. This effectively doubles the lower-rate allowance to DKK 158,800 for the household.
These rates apply to both capital gains (profit from selling shares) and dividends (income received from owning shares). The thresholds are reviewed annually by the Danish government.
What Is Taxed?
Dividends
Dividends are taxed in the year you receive them — not when the company declares them. If a Danish company pays you a dividend in June 2026, that amount is part of your 2026 tax return.
Capital Gains
Capital gains are taxed when you sell shares at a profit. The gain is the difference between your selling price and your acquisition cost (the price you paid to buy the shares, plus any transaction fees).
Losses
Losses on shares can be used to offset gains in the same year. If your total share income for the year is negative, the loss can be carried forward to offset future gains. You cannot deduct share losses against other types of income.
The Average Cost Method
Denmark uses the average cost method to calculate gains and losses. This means the acquisition cost is based on the average purchase price across all holdings of the same company — regardless of which custody account you hold them in.
This is different from FIFO (first in, first out), which some other countries use. Under the average cost method, it does not matter which specific batch of shares you sell; your gain or loss is always calculated against the average cost of all shares in that company.
How to Calculate the Average Cost
- Sum up the total amount you paid for all shares in a company (purchase price × number of shares for each purchase).
- Divide by the total number of shares you hold in that company.
- The result is your average cost per share.
When you sell, the gain or loss is:
Gain/Loss = Selling Price − Average Cost per Share
Worked Example
Suppose you buy shares in Company X on three occasions:
| Purchase | Shares | Price per Share | Total Cost |
|---|---|---|---|
| March 2024 | 100 | DKK 200 | DKK 20,000 |
| September 2024 | 50 | DKK 240 | DKK 12,000 |
| January 2025 | 50 | DKK 220 | DKK 11,000 |
Total shares: 200 Total cost: DKK 43,000 Average cost per share: DKK 43,000 ÷ 200 = DKK 215
You sell all 200 shares in June 2026 at DKK 300 per share.
Sale proceeds: 200 × DKK 300 = DKK 60,000 Gain: DKK 60,000 − (200 × DKK 215) = DKK 60,000 − DKK 43,000 = DKK 17,000
If this is your only share income for 2026, the entire gain falls within the DKK 79,400 threshold and is taxed at 27%.
Tax owed: DKK 17,000 × 27% = DKK 4,590
FIFO Principle
Although Denmark uses the average cost method for calculating gains, the FIFO (first in, first out) principle still applies when determining which shares are sold. Shares purchased first are deemed sold first.
This matters when you are partially selling a position. The FIFO rule determines which shares are removed from your holdings, which in turn affects the average cost calculation for any remaining shares.
Transitional Rules for Pre-2006 Shares
Shares purchased before 1 January 2006 may be subject to different rules. Under certain conditions, gains on these shares can be tax-free, particularly if:
- The shares were held continuously from before 1 January 2006.
- The shares were not part of a business activity.
These transitional rules are complex and depend on individual circumstances. If you hold shares bought before 2006, it is worth consulting SKAT or a tax advisor to determine whether the exemption applies to you.
Declaring Share Income to SKAT
When you file your Danish tax return (typically in March–April each year), you need to report share income in the correct boxes:
| Box | Purpose |
|---|---|
| Box 66 | Gains and losses on Danish listed shares |
| Box 61 | Dividends from Danish listed shares |
| Box 62 | Dividends from non-listed Danish companies |
| Box 68 | Other share income |
| Box 454 | Gains and losses on foreign shares |
| Box 451 | Dividends from foreign shares |
Always check your pre-filled tax return carefully. SKAT populates much of this data automatically, but errors can occur.
The Securities System (Værdipapirsystemet)
Denmark operates a Securities System through which SKAT receives information about your holdings and transactions from Danish custody accounts. This means SKAT already has a record of most domestic share activity.
However, you should always verify that the information is correct. Common issues include:
- Incorrect acquisition costs (especially for shares transferred from another account or inherited).
- Missing transactions from foreign brokers.
- Dividends not properly recorded.
If you use a foreign broker or hold shares outside Denmark, you are responsible for reporting this income yourself.
Dividend Tax: Withholding and Credit
Danish Companies
When a Danish company pays a dividend, it withholds tax at the source. The company deducts the appropriate tax before transferring the net amount to you. This means you do not need to declare the dividend separately in most cases — the withholding covers your liability.
Foreign Companies
If you receive dividends from foreign companies, the foreign country may withhold tax at its own rate. You may be able to claim a tax credit in Denmark for the foreign tax paid, to avoid double taxation.
Denmark has double taxation agreements (DTAs) with many countries, which typically set a maximum withholding rate on dividends. Check whether a DTA exists between Denmark and the country where the paying company is based.
Key Takeaways
- Denmark taxes share income at 27% (up to DKK 79,400) and 42% above that threshold.
- Both dividends and capital gains are taxable. Losses can offset gains.
- The average cost method applies across all holdings of the same company.
- FIFO determines which shares are sold when you partially exit a position.
- Pre-2006 shares may qualify for transitional tax relief.
- Danish companies withhold dividend tax automatically; foreign dividends may require a tax credit claim.
- Always verify your pre-filled tax return against your own records.
For full details and the latest thresholds, visit SKAT’s guide on shares and securities.