Danish fund tax regime: 2025 registration by 31 October 2024

In a nutshell

Each year, foreign investment funds interested in the Danish retail market should check whether they qualify as equity-based investment companies according to Danish tax rules and should consider registering to the 2025 tax regime before 31 October 2024.

If new share classes are created or existing ones are closed, this must also be registered with the tax administration during the year within 2 months.

The regime, which has been in effect since 2020, was introduced to make foreign funds more attractive to Danish individual investors. Under this regime, the yield on “equity-based investment companies” is taxed as “share income” instead of “capital income,” resulting in lower tax rates that apply within certain brackets.

A closer look
 

To qualify as an equity-based investment company, an investment fund must fulfill the following requirements:

Initial notification

Initial notification to the Danish tax authorities must be made no later than 31 October before the calendar year for which the registration should take effect.

Therefore, initial notifications for 2025 should be filed before 31 October 2024.

Annual reporting

The investment fund must invest at least 50% of its assets in equities as defined by the Danish rules. To prove compliance, the investment fund must compile an asset test on at least four evenly distributed dates of the calendar year and submit this asset test information annually to the Danish Tax Authorities before 1 July of the following year.

Accordingly, the asset test information for a 2025 notification should be submitted before 1 July 2026

Qualification as opaque

The fund must qualify as opaque (or non-transparent) for Danish tax purposes. While corporate-based investment funds should typically fulfill this requirement, funds structured on a contractual basis may need an individual assessment.

The list of funds that have applied for this fund tax regime, and are considered equity-based investment companies from 2024 (Liste over aktiebaserede investeringsselskaber 2024), is available on the Danish tax authorities’ website. 

How Deloitte can help

Deloitte can help with the registration of your funds and share classes as equity-based investment companies, as well as with the calculation and submission of the required asset test information within the required deadlines.