Now that we are in Q2 2025, it is a good time time to assess the regulatory shifts in Denmark that will affect businesses across different industries. These updates encompass tax reforms, environmental initiatives, and incentives aimed at fostering innovation and sustainability. Staying informed about Denmark’s business reforms in 2025 is crucial for compliance and strategic planning.
Tax Reforms and Incentives
1. Dividend Tax Exemption for Unlisted Portfolio Shares Effective January 1, 2025, dividends received from unlisted portfolio shares, where ownership is less than 10%, are exempt from taxation. This change aligns the tax treatment of dividends with capital gains on such shares, encouraging investment in startups and small enterprises.
2. Increased Deduction for R&D Expenses The deduction rate for research and development (R&D) expenses has been increased to 108% in 2025, with plans to reach 120% by 2028. This enhancement aims to stimulate innovation by providing greater tax relief for companies investing in R&D activities.
Environmental Initiatives and Green Taxation
1. Introduction of CO₂ Tax on Fuels and Emissions Starting in 2025, Denmark has implemented a new CO₂ tax on fuels, increasing the existing tax by 400%. A separate CO₂ emissions tax has been introduced for companies under the EU Emissions Trading System (ETS), aiming to incentivize reductions in greenhouse gas emissions.
2. Green Investment Window To support the transition to a sustainable economy, Denmark has launched the Green Investment Window, allowing companies to deduct more than 100% of expenses related to eligible green investments. This initiative encourages businesses to adopt environmentally friendly practices.
3. Reforestation and Land Use Changes Denmark has committed to planting 1 billion trees and converting 10% of farmland into forests and natural habitats over the next two decades. This significant environmental initiative aims to reduce fertilizer usage, support biodiversity, and combat climate change.
Conclusion
The regulatory landscape in Denmark is evolving to promote sustainability, innovation, and economic growth. Businesses operating in Denmark should stay abreast of these changes to ensure compliance and leverage new opportunities.
At Internago, we specialize in assisting businesses with international expansion and compliance. Our expertise can guide you through the Danish regulatory environment, allowing you to focus on growth and success.
Be sure to also check out our other blogs about Denmark such as “Setting up as a Foreign employer in Denmark”.
For more information, contact us at info@internago.com or visit our Payroll Portal.
Disclaimer
This blog post provides a general overview and introductory examples related to payroll. In practice, there are many additional factors to consider, and this article should not be regarded as comprehensive guidance. For a more in-depth discussion tailored to your specific needs, please feel free to contact us.