Group tax consolidation taxation is mandatory for Danish resident affiliated companies, permanent establishments in Denmark of foreign affiliated companies, and real properties situated in Denmark of foreign affiliated companies. For the purpose of tax consolidation, affiliated means the shareholder is able to control the company, such as majority ownership of voting rights.
Foreign affiliated companies may also be jointly taxed for Danish tax purposes. While this is voluntary, a 10-year commitment is mandatory when electing for tax consolidation with foreign affiliates.
When a Danish resident has control over foreign affiliates and elects for tax consolidation, all foreign affiliates must be included, including subsidiaries, permanent establishments, and real property of the Danish resident. When the Danish resident is owned by a foreign group, the ultimate parent company and all companies affiliated with the parent must be included.