Guide to m&a tax 2022

a. Worldwide or Territorial Tax System
Resident companies are subject to taxation in Denmark on their worldwide income, according to the Danish Corporation Tax Act art. 8.
Branches and permanent establishments (of non-resident companies) are subject to taxation in Denmark only on their Danish source income.
b. CFC regime
Denmark has two sets of Controlled Foreign Corporation (“CFC”) rules: one regime for CFCs owned by Danish resident individuals, and one regime for CFCs held by 
Danish resident companies or non-transparent entities.
For individuals, CFC taxation will only be imposed if the resident individual controls the foreign company. The Danish individual will be taxed with a flat rate of 22% on 
any CFC income. Note that dividends to pay the CFC income tax may be distributed without tax.
The CFC regime for Danish corporate holders (including all limited liability entities) applies to both Danish and foreign financial companies. The Danish company or 
legal entity must be a “parent company” of the foreign entity in order for the income of the foreign entity to be CFC taxed. The foreign company or legal entity must 
have a CFC income exceeding more than 33.33% of its aggregate income.
c. Foreign Branches and Partnerships
As a main rule, income attributed to a permanent establishment in a foreign country should not be included in the taxable income of the company provided the Danish 
tax authorities agree that a permanent establishment exists, which will have a decreasing effect on the Danish taxes all things being equal.
The corporate income tax rates may differ between Denmark and the “permanent establishment country” leading to a different tax levied on the income attributed to 
the permanent establishment(s).
25 
Denmark
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TAXAND GLOBAL GUIDE TO M&A TAX 2022