On 12 May 206, the Danish Parliament passed Bill no. L149B reintroducing the rules governing employee share schemes. The new provision to be included as s.7P of the Danish Tax Assessment Act (ligningsloven) will affect agreements on the granting of shares, etc., signed after 1 July 2016.

A review of the Bill passed by the Danish Parliament on 12 May 2016, reveals that it is basically a revival of the previous provision of s. 7H of the Tax Assessment Act governing individual employee shares.

The Bill passed by Parliament will result in the Tax Assessment Act being amended to include a new s. 7P. The new provision will affect agreements on the granting of shares, RSUs, PSUs, purchase rights and subscription rights signed on 1 July 2016 or later.


From now on, companies will be able to grant their employees employee shares (shares, RSUs, PSUs, purchase rights and subscription rights) at no cost or at a favourable price without the employees having to pay income tax on the value at the grant date. Instead, the employees become liable to pay tax when they sell their shares. The proceeds from the sale will be taxed as equity income. The company is at liberty to decide whether the shares should be granted to all of its employees or only to certain employees.

Neither the employer company nor the consolidated company may deduct expenses incurred for granting the shares.

Certification by auditor or lawyer no longer required

Compared with the previous provision of s. 7H of the Tax Assessment Act, the new provision of s. 7P does not include the requirement of an auditor or lawyer certifying that the agreements have been signed in compliance with applicable tax exemption rules. Such certificates, therefore, need not be submitted to the Danish tax authorities in the future.

The company granting the shares will be under an obligation to report on the granting and exercising of purchase and subscription rights and on any acquisition of shares from the company to the income register.


According to the tabled Bill, a number of criteria must be met in order for the new rules on employee share schemes to be applicable:

  • The employee and the employer company must agree on the granting of shares being subject to s. 7P;
  • The value of the granted shares may never exceed 10% of the employee's annual salary at the time of signing the agreement;
  • The shares must be granted by the employer company or a consolidated company as part of an employment relationship, for which reason board members cannot qualify as eligible grantees,
  • Shares granted under employee share schemes must not make up a special class of shares;
  • Purchase and subscription rights may not be assigned to any third party.