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Salary and dividend tax
Salary and dividend tax

Salary does not handle the payment of dividends

Peter Ejskjær avatar
Skrevet af Peter Ejskjær
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What is dividend and dividend tax?

If a company pays out or distributes part of its profit after corporation tax to one or more of its owners, this is called a dividend. It is only some type of companies, where it is permitted to distribute dividends, which is Entrepreneurial limited companies, Private limited companies and Limited companies (IVS, ApS and A/S). The dividend tax is 27% in Denmark as of 2021, and it is the distributing company which is responsible for withholding and paying this tax. It is important to keep in mind that dividend tax is different from share income taxation.

The difference between share income taxation and dividend tax

If you as a privat person receive dividends, then you are liable for tax on the received dividends. The received dividends is subject to share income taxation.
The share income taxation per 2021 follows these rates:

Share income

Tax rate

Up to 56.500 Kr


Everything above 56.500 kr.


As mentioned above, you have to pay 27% of the share income as tax, if you have a total share income of less than 56.500 kr. Everything you earn as dividend and share income in addition to the 56.500 kr. is subject to a tax of 42%. This gives three conceivable examples of how to handle dividends:

Example 1 - Your share income in a year is less than 56.500 kr.

If you receive dividends and your total share income incl. the dividend is less than DKK 56,500, then you, as a private person, do not have to do anything active in connection with receiving the dividend. The company has then arranged to pay 27% tax on the dividend, and you receive the dividend after the tax has been paid.

Example 2 - Your share income in a year exceeds 56.500 kr. due to divident payment

If you have had a share income of 50.000 kr. during the year and then receive dividends of 10.000 kr. In that case, the company that distributes the dividend will pay 27% tax on the DKK 10,000 but then you would need to pay the following in tax:

(42%-27%) x (10.000 - (56.500-50.000)) = 15% x 3.500 = 525 kr.

This amount is the difference between 42% and 27% and then multiplied by the value of the dividend, which means that the share income exceeds 56.500 kr. Because the company that distributes the dividend always only pays 27% in tax for you, you must ensure that you pay the difference (15%) on all share/dividend income over DKK 56,500. In this example, you, as a private individual, must either pay the DKK 525 voluntarily or pay with your annual statement.

Example 3 - Your share income has already exceeded 56.500 kr., at the time you receive your dividend payment

In this case, the company that distributes the dividend only pays 27% tax on the dividend. However, because your share income is greater than DKK 56,500, you must pay 42% tax. This means that you yourself must pay (42%-27%)=15% in tax on the entire dividend amount. So if you receive a dividend of DKK 10,000, you pay:

(42%-27%) X 10.000 kr = 15% * 10.000 kr = 1.500 kr

You, as a private person, pay this yourself voluntarily. You can see how this is done here

Dividend tax from the company's perspective

Companies that distribute dividends must, as mentioned, withhold 27% in dividend tax. This means that the company is responsible for paying 27% tax for the persons to whom the company pays dividends. Specifically, you must pay the dividend tax no later than the 10th of the month after adopting the dividend. If, for example, on March 17. you adopt a dividend for the two owners of a total of DKK 10,000, you must have paid DKK 2,700 in dividend tax by April 10. at the latest. The payment takes place as a transfer via Netbank for the payment line regarding dividend tax, which you can find on TastSelvErhverv

The reporting of the dividend payment to owners takes place on TastSelvErhverv under 'udbytteskat og modtagere', where you enter the relevant information on the dividend recipients. See more here

Salary and dividend payments

Salary does not handle dividend payments or reports. dividend payments take place as described above, and it is up to the company itself to report the dividend and make the withholding/payment of the dividend tax. Salary only handles salaries and fees, not dividends.

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