Denmark Plans to Broaden 22% Tax on Cross-Border Loans

Denmark plans to expand its 22 percent withholding tax to cover more cross-border loans. The Danish Ministry of Taxation released a draft bill on October 6, 2026. This move affects foreign professionals, business owners, and cross-border investors in Denmark.

The new tax rule targets profit-participating loans and hybrid financing arrangements. It also includes certain third-party loans involving non-resident companies. The Danish parliament will review the draft bill in December 2026.

If approved, the tax will apply to interest income from April 2027 onward. Taxpayers involved in international financing should track these legal changes.