Getting a tax deduction starts long before you file your return; it starts with the way you buy things and the way you record them. In Denmark, whether you operate as a sole trader (enkeltmandsvirksomhed) or run a limited company (ApS or A/S), SKAT allows you to deduct expenses that are directly connected to earning your business income — but the shape of the system differs meaningfully by structure, and everything sits on the quality of your documentation. Get that right and legitimate deductions become a significant part of keeping more of what you earn; get it wrong and claims quietly fall away at audit time. This guide sets out what you can deduct, how the rules differ between sole traders and companies, which expenses are off-limits, and the record-keeping that keeps your claims safe.
Deductions for Sole Traders
A sole trader reports business income on a personal tax return (personlig indkomst). The underlying test is straightforward: you can deduct all necessary business expenses, anything directly connected to earning that income. The practice, as ever, hangs on proof — every deduction should be supported by a receipt, invoice or bank statement.
The stakes are higher than they first appear because of the rates involved. Danish personal income tax can reach 52.5% including the 8% labour market contribution (AM-bidrag), so every krone you legitimately deduct saves you real money at your marginal rate.
Home Office Rules
If you work from home, you have two options. The standard deduction of DKK 28,000 a year requires no calculation at all — you simply claim it. The actual-costs method comes into play when more than 20% of your home is used for business purposes, in which case you deduct the proportional share of rent or mortgage interest, utilities, insurance and maintenance, worked out on floor area. If your genuine home office costs exceed DKK 28,000, the actual-costs route produces the larger claim; if they do not, the fixed deduction is both simpler and more generous. Either way, keep a record of your floor-area calculations.
Travel and Transport
Business trips are well covered. Train tickets, flights, taxis and other transport costs for business purposes are fully deductible, as are hotel costs for overnight travel and reasonable meal expenses while away from your usual workplace. For using your own vehicle on business, the mileage rates are DKK 3.56 per km for the first 20 km and DKK 1.97 per km above that — amounts worth logging accurately, since a dated travel log documenting distance, destination and purpose is what SKAT expects to see behind the claim.
Equipment and Assets
A useful rule of thumb governs purchases. Items costing less than DKK 14,300 (the 2026 threshold) can be deducted in full in the year you buy them. Anything above that must be depreciated over its useful life, typically three years for computers and IT equipment, and five years for furniture, fittings and vehicles. Laptops, monitors, desks, chairs and printers all fall somewhere in that picture, so it is worth knowing which side of the line each purchase sits on before you commit.
Subscriptions, Software and Education
Recurring costs such as cloud services, hosting, accounting and bookkeeping software are deductible, as are industry publications and professional memberships directly relevant to your business. Education is a broad and useful category here: courses, certifications, workshops, conference fees and industry training that maintain or improve your professional skills are fully deductible, and even courses on new technologies or management can qualify when they relate to what you do. Insurance follows much the same logic — business insurance (brandforsikring), professional liability insurance (ansvarsforsikring) and product liability cover are all deductible.
Marketing, Administration and Phone
Website hosting, domain names, online and print advertising, business cards and promotional materials are the obvious marketing claims; networking events and business memberships have a place too. Accountant and auditor fees, bookkeeping software and legal fees for business matters are all deductible. For your phone and internet, the rule is proportionality: only the business portion of the cost is deductible, so if you use your phone 60% for business you deduct 60% of it, backed by a log or a defensible estimate of your usage.
Deductions for Companies (ApS/A/S)
A limited company pays 22% corporate tax on its taxable profit, and the deduction categories available to it are broader than those for sole traders. Salaries and wages, employer pension contributions (arbejdsgiverbetalt pension), holiday pay (feriepenge), staff training and qualifying employee benefits all reduce the company’s bill. Interest on business loans and overdrafts — bank borrowing, asset financing, and intercompany loans subject to transfer pricing rules — is deductible against corporate profit. Bad debts can be written off when a customer genuinely fails to pay and you can show reasonable collection efforts.
Companies also depreciate tangible assets on a set of annual rates, which makes planning more predictable:
| Asset Type | Annual Rate |
|---|---|
| Buildings and permanent structures | 4% |
| Machinery and equipment | 25% |
| Vehicles | 25% |
| IT equipment | 33% |
Depreciation gradually reduces an asset’s book value and produces a tax deduction each year while you own it. When the asset is eventually sold, any profit above its depreciated value is taxable.
What You Cannot Deduct
Some expenses are simply not deductible, for either structure. Personal spending — clothing, groceries, personal travel, gym memberships — is out unless it is genuinely business-related. Fines and penalties paid to authorities or courts are out, as is most client entertainment, which is heavily restricted and generally-not or only-partially deductible. Gifts to customers or partners above DKK 600 per person per year cannot be claimed, and sports clubs, social clubs and similar memberships are disallowed unless you can demonstrate a direct, documented business purpose. Vehicle claims are limited to the business mileage portion, and only the business share of phone costs counts — the private slice never does.
Documentation Requirements
Documentation is where deductions live or die. SKAT’s expectations are simple to state: keep receipts and invoices for every expense, retain bank statements showing the transactions, maintain records for five years from the end of the tax year for sole traders or six years for limited companies, use bookkeeping software to track income and expenses as they happen, and log mileage if you claim vehicle deductions. Poor records are one of the most common reasons claims get disallowed during an audit, and digital receipts plus cloud-based bookkeeping have made compliance considerably easier than it once was.
A Worked Example
To see the effect in numbers, consider a sole trader consultant with DKK 700,000 of annual revenue. Across the year they accumulate deductions of DKK 146,000: DKK 60,000 in office rent, DKK 15,000 for a computer, DKK 12,000 in software subscriptions, DKK 20,000 in travel, DKK 6,000 as the business portion of phone costs, DKK 8,000 in business insurance, DKK 10,000 in marketing and DKK 15,000 in accounting fees. That leaves taxable income of DKK 554,000. At the 52.5% top marginal rate including AM-bidrag, the tax due is DKK 290,850, an effective rate of 41.5% on the DKK 700,000 of revenue. Without the deductions the same revenue would have attracted DKK 367,500 in tax, so the DKK 146,000 of legitimate claims saved DKK 76,650 — a convincing argument for keeping proper records from the start.
Staying on Top of Claims
None of this demands heroic effort, but it does reward habits formed early. Set up a bookkeeping system as soon as the business starts, open a dedicated business bank account to keep personal and business money apart, scan receipts as they arrive rather than losing them, and review your deductions before each filing so nothing eligible is missed. If your actual home costs sit below DKK 28,000, the standard deduction is usually the better call. Where the rules get ambiguous — which they do, particularly around borderline expenses — a Danish accountant who knows your industry can spot claims you would never think to make, and the fee is itself deductible. Tax thresholds and rates change every year, so the figures in this guide are a starting point; verify the current numbers before you file. Keep the receipts, keep the log, and the deductions look after themselves.
Reference
This guide is based on the business deduction rules published by SKAT.dk. Tax rules change annually — always verify current thresholds and rates before filing.