Executive Summary
Denmark’s tax landscape saw major policy proposals and enforcement actions this week. The government proposed a cap on interest deductions affecting the top 1.2% of earners, while the Business Authority launched an opt-out e-invoicing auto-enrollment scheme. Simultaneously, a nationwide social dumping crackdown revealed 67–89% non-compliance rates across four regions, and the 2027 preliminary tax assessment portal opening was delayed to November 24.
Important Updates
Proposed Interest Deduction Cap Targeting High-Income Earners
The Danish government has proposed a ceiling on interest deductibility, calibrated at DKK 500,000 annually with a phase-out for incomes above DKK 2.5 million. According to analysis by the Economic Council of the Labour Movement, the measure would impact only 1.2% of taxpayers—primarily high-net-worth individuals, property investors, and foreign executives with substantial leverage. The cap aligns with OECD BEPS Action 4 and aims to reduce tax subsidies for excessive borrowing, potentially generating several billion kroner annually. If enacted, it would apply from the 2027 income year, requiring affected taxpayers to adjust preliminary assessments and review loan structures before year-end 2026. The proposal is undergoing public consultation until December 2026, with parliamentary readings expected in early 2027.
Sources: The Local Denmark
Mandatory E-Invoicing Auto-Enrollment Scheme Launched
The Danish Business Authority (Erhvervsstyrelsen) has introduced an automatic enrollment mechanism for e-invoicing, shifting from opt-in to opt-out for all businesses using registered accounting software. Effective immediately with a phased rollout through Q1 2027, software providers (including Visma, e-conomic, Dinero, Billy) must activate PEPPOL-based e-invoicing by default, configuring CIUS-compliant UBL 2.1 formats. This move accelerates Denmark’s alignment with the EU’s VAT in the Digital Age (ViDA) agenda and supports SKAT’s transition toward continuous transaction controls. The mandate covers an estimated 300,000+ entities, disproportionately impacting SMEs. Auditors must advise clients on opt-out decisions, VAT workflow impacts, and update engagement letters. Non-compliance with existing B2G e-invoicing rules remains penalized; B2B compliance follows standard VAT invoicing requirements.
Sources: FSR Danske Revisorer
Secondary Regulatory & Regional Updates
- Nationwide Social Dumping Crackdown Reveals Systemic Non-Compliance Across Four Regions: On October 30, Skattestyrelsen published results from coordinated inspections in Billund (13/15 non-compliant), north of Copenhagen (7/8), Køge (10/15), and western Copenhagen suburbs (8/9). Violations include underreported income, missing VAT registrations, false self-employment, unpaid holiday allowances, and failure to report posted workers to RUT. Extended audits are underway with potential 10-year lookback and penalties up to 200% of evaded tax. Principal contractors face secondary liability under the Contractor Liability Act. Billund | North Copenhagen | Køge | Vestegnen
- 2027 Preliminary Income Assessment Portal Opens November 24 with Two-Week Delay: Skattestyrelsen confirmed the TastSelv portal for 2027 preliminary assessments opens November 24 (vs. usual November 10) due to system updates for the new three-tier top tax brackets (middle, top, top-top) and proposed VAT cut on food. Taxpayers should review commuting deductions, union fees, childcare, and pension contributions by December 15 to ensure correct January withholding. The final correction deadline remains May 1, 2027. Skattestyrelsen | The Local Denmark
- Eight Modifications to Corporate Tax Disclosure Form for 2026 Income Year: Skattestyrelsen implemented structural changes to the mandatory corporate disclosure form, including dedicated crypto-asset fields (aligned with OECD CARF/DAC8), loss carryforward validation rules, mandatory transfer pricing and CFC documentation references, beneficial ownership change reporting (>25%), and ISIN-level granularity for mark-to-market securities. Filing deadline remains May 1, 2027 (Nov 1 with extension), but systems must be configured by Q4 2026. Non-compliance risks return rejection, estimated assessments, and penalties up to DKK 60,000. Guidance on crypto valuation due December 2026. FSR Danske Revisorer
- FSR Presents 18 Proposals for Tax Simplification Targeting 2028 Implementation: The Danish Auditors Association delivered 18 proposals to the Tax Minister across five pillars: raising SME thresholds, reducing VAT/preliminary tax filing frequency to semi-annual for sub-DKK 50M turnover, harmonizing deduction rules, introducing de minimis transfer pricing exemptions (
FSR Danske Revisorer
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.