Guide to m&a tax 2022

f. 
 Depreciation and amortisation
• 
Depreciation
When acquiring assets, the basis for the buyer’s depreciation of assets is based on the purchase price (market value), which normally involves a step up in value of the 
assets compared to the seller’s tax value of the assets. The buyer will then receive a higher basis for depreciation on depreciable assets.
The various categories of assets have different depreciation profiles. Consequently, the purchase price allocation in an asset deal is of great importance for the 
estimation of future cash flow.
Most operating assets, such as plant, machinery, equipment and motor vehicles, may be depreciated by up to 25% per year in accordance with the declining 
balance method. The depreciation rate can vary from year to year at the taxpayer’s discretion. The price of minor assets, software and certain equipment 
or R&D may be written off in the year of acquisition, whereas certain heavy fixed assets and infrastructural facilities are subject to a reduced 
depreciation rate.
13 
Denmark
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TAXAND GLOBAL GUIDE TO M&A TAX 2022
Generally, buildings are depreciated individually using the straight line method with a depreciation rate of up to 4% a year. The following building types are in general 
not depreciable, unless integrated with or closely related to a manufacturing or depreciable building:
• 
Office buildings,
• 
Banks, credit institutions etc.,
• 
Businesses operating postal services,
• 
Accommodations (apart from hotels and camping cabins),
• 
Some apartment hotels and nursing homes, and
• 
Hospitals, dentists, doctors’ offices, etc.
Intangibles (including goodwill) acquired by a Danish company are generally depreciable by up to one-seventh annually. Knowhow and patents are subject to 
favourable rules that allow immediate write-off of the purchase price in the acquisition year.
Generally, the annual depreciation charge for tangible and intangible assets is computed on the cash equivalent of the cost price. The cash equivalent price is the 
actual cost price less the excess of the nominal value of loans (taken over from the seller) over market value.
Amortisation
The purchase price (or a proportion) can be depreciated or amortised for tax purposes.