Expansion of the special section 7P regime enters into force

Published 24 June 2026

The Danish Ministry of Taxation and Economic Growth has announced that the expansion of the special regime for qualifying new and smaller companies in section 7P of the Danish Tax Assessment Act (ligningsloven) will enter into force on 1 July 2026.

The amendments were adopted by the Danish Parliament in December 2025. As the expansion required approval under the EU State aid rules, the Act left the commencement date to be determined by the Minister for Taxation. That approval has now been obtained, and the Ministry has confirmed that the new rules will apply from 1 July 2026.

Section 7P allows employees to receive shares, share options and warrants in connection with their employment without being taxed at the time of grant or exercise, provided that certain statutory conditions are met. Taxation is instead deferred until the underlying shares are disposed of, at which point any gain is taxed as share income.

Under the current special regime, qualifying new and smaller companies may grant share-based remuneration with a value of up to 50 per cent of an employee’s annual salary. From 1 July 2026, this percentage-based limit will be replaced by a minimum annual salary requirement.

Accordingly, provided that all relevant conditions are met, employees with an annual base salary of at least DKK 265,300 (2026), corresponding to the Danish unemployment benefit rate (dagpengesatsen), may receive shares, share options or warrants without a statutory cap based on a percentage of their annual salary. The removal of the percentage-based limit also removes a practical burden, as qualifying companies will no longer need to value the relevant share-based remuneration for section 7P purposes.

The expansion also widens the group of companies that may use the special regime. Compared with the current rules, the relevant thresholds are expanded as follows:

the maximum period during which the company may have been active on a market is increased from less than five years to less than 10 years;
the maximum number of employees is increased from 50 to 150; and
the limit for annual net turnover or balance sheet total is increased from DKK 15 million to DKK 200 million.

These expanded thresholds are only part of the eligibility test. All conditions in section 7P(7) must still be met in order to use the expanded regime.

The ordinary section 7P limits remain relevant for companies and employees that do not qualify for the expanded regime. The general 10 per cent limit therefore continues to apply. The limit may be increased to 20 per cent where the opportunity to acquire the same type of 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.

The amendments apply to agreements concerning grants of shares, share options and warrants entered into after the amendments enter into force.

Further information on the amendments is available in the press release from the Danish Ministry of Taxation and Economic Growth here.

Need advice?
Mazanti-Andersen is available to advise on the establishment and revision of warrant programmes and other employee incentive arrangements, including the use of the expanded section 7P regime.

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