Dividend tax

The general rules below apply to investors who are domiciled in Denmark for tax purposes and investors liable for tax on pension investment returns.

The taxation of dividends depends on the individual investor's situation. Investors who are in doubt about their tax positions should seek individualised advice.

Individuals
On their tax returns, individuals must report dividends received under share income. For 2008 income, the following thresholds apply: Income up to DKr46,700 is taxed at a rate of 28%. Income from DKr46,701 to DKr102,600 is taxed at a rate of 43%. Income exceeding DKr102,600 is taxed at a rate of 45%. For tax purposes, spouses may transfer dividend income to each other in order to utilise the lower rates.

When Danske Bank pays dividends, we withhold 28% in tax. Dividend tax withheld on income below the lower limit (DKr46,700, or DKr93,400 for couples) is the final tax. This means that it cannot be set off against the total amount of payable tax.

Companies
Companies must include in their income 66% of any dividends received. Their effective tax on dividends is therefore 16.50% (25% of 66%).

We withhold 16.50% in dividend tax on dividend payments to companies, and the amount is included in the company's tax on account after a deduction of 1%.

Investors liable to tax on pension investment returns
Dividends are included in the tax base for the tax on pension investment returns. Pension investment returns are taxed at a rate of 15% on the basis of an annual mark-to-market valuation.

We do not withhold dividend tax when we pay dividends into pension custody accounts.

International investors
Dividends payable to investors domiciled outside Denmark for tax purposes are taxed at 28% in Denmark. The Danish dividend tax may be reduced if a double-taxation treaty exists between Denmark and the country in which the investor is domiciled for tax purposes. International investors can claim a refund from the Danish tax authorities of excess tax paid in Denmark.

The dividend tax levied in the investor's country of domicile depends on the country's national tax rules.

Last updated on October 3, 2007