Article:

Joint Taxation in Denmark

28 September 2018

Danish companies, which are part of a group of Danish companies, are covered by the mandatory rules on national joint taxation. International joint taxation with foreign group companies, foreign permanent establishments and foreign real estate is voluntary. 

Companies shall be aware of recent amendment to the joint taxation rules for companies under bankruptcy. The changes are effective for bankruptcy notices passed after 1 January 2017. 

Danish companies, which are treated as separate taxable entities, shall calculate their taxable income, file the tax return and pay the corporate income tax due on their own behalf. Companies can, however, be covered by the rules on joint taxation where the company is taxed together with other group companies. 

Joint taxation implies that the loss in one company can be set off against the taxable income in another company, which is part of the joint taxation. 

Danish corporate taxation comprises two different types of joint taxation; mandatory joint taxation, which applies to all Danish entities within the same group, and volun-tary international joint taxation, which makes it possible to include foreign companies, foreign permanent establishments and foreign real estate in a joint taxation with Danish entities within the same group.

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