Proposed amendments to section 7p of the Danish Tax Assessment Act
Published 28 August 2025
Category: Taxation / VAT
On 26 August 2025, a draft bill regarding amendments to section 7p of the Danish Tax Assessment Act (in Danish: ligningsloven) was submitted for consultation.
According to section 7p currently in force, companies can offer shares, share options and warrants to employees under section 7p of a value equal to a certain percentage share of the employee’s salary: (a) up to 10% the employee’s annual salary as the general rule; (b) up to 20% the employee’s annual salary, if the opportunity to acquire shares, share options or warrants is offered on equal terms to at least 80 per cent of a group of the company’s employees determined on the basis of general criteria; and (c) up to 50% of the employee’s annual salary, if the company has been active on a market in less than 5 years, has maximum 50 employees, and either the company’s net turnover or balance sheet total does not exceed DKK 15 million (and certain other conditions).
The draft bill proposes amendments to litra (c) above:
- It is proposed to remove the 50% limit and instead introduce a requirement that the employee’s annual base salary shall be as a minimum DKK 253,100 (2025), equal to the rate of unemployment benefit (in Danish: dagpengesatsen). Consequently, for companies fulfilling the (new) requirements under litra (c) (see below), there is no limit with respect to the maximum value of share-based salary to be offered under section 7(p), and no valuation of the company is required.
- Further, it is proposed to increase the above thresholds to the effect that share-based salary can be offered under litra (c) above, if the company has been active on a market in less than 10 years, has maximum 150 employees, and either the company’s net turnover or balance sheet total does not exceed DKK 200 million (and certain other conditions).
Litras (a) and (b) above are unchanged, and for companies not fulfilling the (new) requirements under litra (c), or employees whose’ salary does not exceed the new threshold, share-based salary can be offered under section 7p adhering to the 10% or 20% threshold, as applicable, in accordance with existing rules.
Today, share-based remuneration cannot be offered to board members or consultants applying section 7p, and this remains unchanged under the new bill.
The consultation deadline for the bill is 25 September 2025. If the bill is adopted by the Danish parliament, the Ministry of Taxation shall determine the date on which the amendments shall take effect.
Further details of the draft bill can be found here.
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