All questions

Tax residence and fiscal domicile

i Corporate residence

A company is considered to be tax-resident in Denmark if it is incorporated and registered in Denmark. A non-domestic company is considered to be tax-resident in Denmark if it has its place of effective management in Denmark. Under Danish law, the 'place of effective management' first and foremost refers to the day-to-day management of the company. Accordingly, a non-domestic company will be regarded as tax-resident in Denmark if the day-to-day management is carried out from Denmark.

ii Branch or PE

Non-resident companies can be subject to limited tax liability either through a PE in Denmark (usually a branch registered as such with the Danish Business Authority), Danish real estate or through withholding taxes on income from certain Danish sources.

Non-resident companies that carry on business or participate in business in Denmark through a PE are subject to tax on all income attributable to the PE.

In general, the Danish tax treaties are based on the OECD Model Tax Convention. The tax authorities apply the OECD guidelines when determining whether a PE exists, including the agent rule; however, the guidelines will be interpreted in view of domestic law.