Dividend tax can be tricky to navigate. This is typically because you need to know a rule or two and remember to report it correctly.

Taxes, percentages, dividends, and annual reports aren't rocket science, but they can certainly feel like it. If you are in uncharted territory and unsure which way to turn, this blog post is just for you.

Like a lighthouse guiding ships, we want to show you the way so you can stay on track, get the right information, and pay the correct dividend tax.

What is dividend tax?

Let's start by getting the basics in place.

Dividend tax is a technical tax term referring to the tax imposed on shareholders when they receive dividends from a company.

The dividend itself is the portion of a company's profit that is distributed to its shareholders or owners. The amount is decided at the company's annual general meeting and is distributed proportionally based on ownership shares. Therefore, you receive the most if you are a majority shareholder.

If 400,000 DKK is distributed from the company's profit, the person who owns 50% of the shares also receives 50% of the 400,000, and so on.

Tax on dividends – what is the rate?

As mentioned, it is at the company's general meeting that the size of the dividend is decided.

Although it would be very nice, dividend distributions are not exempt from the Danish Tax Agency's involvement, and you must therefore pay tax on the amount.

Section 16 of the Tax Assessment Act (Ligningsloven) stipulates that dividends are taxable. To determine how they are taxed, we must look at Section 4 of the Personal Tax Act (Personskatteloven). This states that dividends are to be taxed as share income.

The tax on dividends is 27% and 42% this year (2025 rate). This means that dividends up to 67,500 DKK are taxed at 27%, after which dividends exceeding 67,500 DKK are taxed at 42%.

The above only applies if you are distributing from an operating company or a holding company to an individual. Different rules apply if you are distributing from an operating company to a holding company, which you can read more about below.

Dividends from an ApS

Dividends are distributed from companies and not from sole proprietorships, because the owner's and the business's assets are effectively the same.

Dividends from an ApS or A/S can either be distributed directly to the owners or paid out to holding companies.

If a holding company owns at least 10% of the dividend-paying company, no tax is payable. This is because the profit has already been taxed at 22%.

It can be a smart move to keep an operating company's profit in a holding company to protect it.

If you need to distribute dividends from a company to yourself or perhaps a holding company, you can do it quickly and easily using our tool. Read more about it here.

Dividends from a holding company

Above, you learned that you can distribute dividends from an operating company to a holding company. And if the holding company owns 10% of the operating company, the distribution is tax-free.

If you wish to distribute dividends from the holding company to yourself at a later date, the same rules apply as those described in the section on dividend tax.

If you have a holding company from which you need to distribute dividends, you can read more about the process and our tool by clicking here.

Is a dividend guaranteed?

No, a dividend is not guaranteed. It is up to the company to decide whether to pay out dividends, and the decision is often based on the company's articles of association and dividend policy. These documents determine how any profit is to be distributed and whether it should go to investors, shareholders, or be used for other purposes.

Furthermore, distributing dividends requires the company to have a profit. If the company has made a profit, it may choose to pay dividends, but if there is a deficit or previous losses that need to be covered, it may mean that there are insufficient funds to distribute dividends.

How do you report dividend tax?

To report dividends, it is first and foremost important that there is a dividend to distribute.

It is at the company's general meeting that the board approves a proposal for the distribution of dividends. Moreover, dividends may only be distributed from the company's profit – and not from any deficit.

Dividends must be reported to the Danish Tax Agency (Skattestyrelsen). You do this via TastSelv Erhverv, and depending on who or what you are distributing to, you will need to enter a variety of information.

On behalf of the company, the person authorized to distribute dividends must go to "Udbytteangivelse" on TastSelv Erhverv.

From here, the person must enter information about the recipients, the dividend amount, etc.

If you are distributing dividends to individuals, you must also enter the "withheld dividend tax." This is because the recipient of the dividend must pay tax on the amount according to the rates we showed you earlier in this post.

If you are distributing dividends to a holding company, you must enter "0" for withheld dividend tax, as distributions from an operating company to a holding company are tax-exempt.

Once the dividend has been distributed, it should appear on the recipients' tax assessment notice. If you have received a dividend, it is therefore a good idea to ensure that it has been correctly recorded in your tax assessment notice.

There are several things to be aware of. In this regard, it may be a good idea to seek professional help.

If you need to distribute dividends while using Reportability, our tool will help you determine exactly how to report it to the Danish Tax Agency, and if you have questions about the process, you can always ask our support team in the chat.

When do you receive dividend payments?

Danish companies distribute dividends once a year, but the timing of when you receive your dividend as a shareholder will likely vary. It can only take place once the company's annual report has been presented at the annual general meeting and a dividend has been approved.

Once that has happened, the person authorized to distribute dividends is responsible for transferring the funds to the shareholders.

Reportability helps you with reporting dividend tax and annual reports

Reportability is an online tool where you can generate your own annual report and submit it to the Danish Business Authority. At the same time, you get a comprehensive guide on how to report tax and dividend tax on your company's tax return.

This also applies to the reporting of dividends and dividend tax, as well as the calculations themselves.

If you need help, you can always contact our accountants, who are ready to assist you in the chat.

The process is divided into 5 steps, and it takes an average of 30 minutes to complete.