The following are not deductible for Danish tax purposes or have limited deductibility:
- Any expenses not incurred for the production of taxable income are not deductible;
- Expenses incurred for establishment or expansion are not deductible. However, effective from 1 January 2018 payroll and related costs in connection with establishment of new business or expansion of existing business are deductible;
- Fines or penalties paid as a result of criminal offenses are not deductible;
- Interest payments due to late tax or custom duty payments are not deductible;
- Bribes paid if the payment of the bribe would constitute a violation of the Danish Penal Code if paid in Denmark are not deductible;
- Business entertainment expenses incurred in excess of 25% are not deductible; and
- Effective 1 July 2021, the deduction of payments to associated persons resident or registered in a non-cooperative jurisdiction as listed by the EU is disallowed (see Sec. 13.5. for list of non-cooperative jurisdictions). The same applies where the payment is made to a person who is not the beneficial owner and the payment is passed on to a recipient in a listed non-cooperative jurisdiction. However, the restriction does not apply if the relevant jurisdiction is an EU/EEA Member State or has a tax treaty with Denmark.