If you hold shares through a foreign brokerage — whether Interactive Brokers, DEGIRO, or any other non-Danish platform — the tax rules you face are fundamentally different from those a Danish broker would handle for you. SKAT does not automatically receive information from foreign custody accounts. No filing is pre-filled, no calculation is done for you, and no gentle reminder arrives in January. The full reporting burden sits squarely on your shoulders, and getting it right — or wrong — is entirely your own work. This guide walks through every obligation step by step: purchases, sales, dividends, the foreign tax credit, and the year-end declarations that trips up more investors than any other step.
Why Foreign Custody Accounts Are Different
The difference is not a tax-rate change; it is an information-flow change. With a Danish broker, the broker reports your transactions and dividends to SKAT automatically, and the Securities System (Værdipapirsystemet) handles much of the calculation for you — gains, holding periods, even some tax-position maths. That safety net simply does not exist with a foreign account. You must track, calculate and report everything yourself, in Danish kroner, on a Danish tax return, with no assistance from the platform that holds your shares.
The stakes are real, not hypothetical: if you fail to report, you risk penalties and lose the ability to claim deductions on future losses. A single undocumented gain can cascade into a permanently inflated cost basis problem.
Reporting Purchases
Every share purchase made through a foreign custody account must be reported to SKAT via E-tax (TastSelv) by 1 July of the year following the purchase. This is the foundation of everything that comes after, because the reported purchase prices become your legally recognised cost basis.
For each purchase, include:
- Share identity — company name, ticker symbol, and ISIN if available
- Number of shares purchased
- Date of purchase
- Purchase price in DKK, including all associated costs (brokerage fees, currency conversion charges)
Converting to DKK at the exchange rate on the date of purchase is your responsibility, not your broker’s. Keep all receipts and transaction confirmations — ideally digitally, with dates and amounts attached.
The common mistake: forgetting to report a purchase means you cannot prove your cost basis later. If you then sell those shares, SKAT may treat the entire sale proceeds as a gain, because no documented purchase price exists on file. That is the difference between taxing a profit and taxing your own capital back.
Reporting Sales and Calculating Gains or Losses
When you sell shares from a foreign custody account, there is no automatic pre-filling and no one else computing the figure. You calculate the gain or loss yourself, and you place it in the correct box:
- Danish listed shares (shares admitted to trading on a Danish regulated market): report in box 66 on your tax return.
- Foreign shares: report in box 454 on your tax return.
If you also hold Danish listed shares through a Danish broker, those can flow through the Securities System automatically. But shares held in a foreign account must be reported manually regardless of whether they are Danish or foreign — the location of the holding decides the paperwork, not the nationality of the company.
The gain or loss is calculated as:
Sale proceeds (in DKK) minus purchase price including costs (in DKK) equals gain or loss.
If you have made multiple purchases of the same share at different times, use the FIFO (First In, First Out) method — the earliest purchased shares are treated as sold first. Work through every sale methodically; gains on foreign shares are a frequent source of both overpayment (when people forget a loss) and underpayment (when they forget a gain).
Declaring Dividends
Dividends received from shares in a foreign custody account must also be declared, and the correct box depends on the company:
- Danish shares: report in box 62 (qualifying dividends subject to lower rate) or box 68 (non-qualifying dividends).
- Foreign shares: report in box 452.
The withholding tax that the paying country took before the dividend reached you does not disappear — it becomes a credit claim. Any foreign withholding tax you paid on those dividends can be declared in box 496 for potential credit against your Danish tax liability. The critical limit: the credit is capped at the Danish tax rate on that income. You cannot claim back more than you would have paid to Denmark on the same income, even if the foreign withholding was higher.
The Foreign Tax Credit
Denmark allows you to deduct foreign tax paid on investment income — but only up to the Danish tax rate applicable to that income. The rule exists precisely to stop investors from engineering tax bills by hunting out high-withholding-tax regimes: any foreign tax above the Danish rate is simply unrecoverable.
Example: if you paid 25% withholding tax on a US dividend and the Danish tax rate on that income is 27%, you can credit the full 25%. But if the foreign rate were 30% — higher than Denmark’s — you could only credit 27%, with the excess lost.
You must be able to document the foreign tax paid. Keep the withholding tax certificates or brokerage statements that show the tax deducted, because a credit claim without evidence is a claim waiting to be rejected.
Market Value Declaration (Year-End)
Each year, you must declare the market value in DKK of all securities held in your foreign custody account as of 31 December. This is reported on your annual tax return, and SKAT uses the figure to track your total wealth for certain tax calculations, including potential wealth tax assessments.
The classic mistake: investors forget this step entirely because it feels like a no-op. Even if you had no gains, no sales and no dividends in the year, you still must report the year-end market value. It is a standalone obligation that applies to every holder of foreign securities, every year, active or not.
Double Taxation Agreements
Denmark has double taxation agreements (DTAs) with a large number of countries, and these treaties shape both the withholding you pay abroad and what you can claim at home. In practice they typically:
- Reduce withholding tax rates on dividends and interest paid from one country to a Danish tax resident
- Prevent double taxation by allowing credit for foreign tax paid
For example, under the Denmark-US DTA, US withholding tax on dividends is generally reduced from 30% to 15% (or 25% for certain pension funds). Similar reductions apply under agreements with the UK, Germany, Sweden, Norway and many other countries. The reduction is never automatic — you normally submit a residency certificate and a treaty claim to the paying broker — so check the specific DTA that applies to the country where your shares are domiciled, or where the paying company is resident.
Mistakes That Cost Money
| Mistake | Consequence |
|---|---|
| Forgetting to report purchases | Cannot deduct losses when you eventually sell |
| Not reporting market value at year-end | Risk of penalties and inaccurate wealth reporting |
| Claiming too much foreign tax credit | SKAT may reject the claim and impose penalties |
| Not reporting dividends at all | Tax evasion — penalties and back-taxes |
| Using wrong exchange rate dates | Incorrect gain/loss calculations |
| Assuming SKAT already knows | SKAT receives no automatic reports from foreign brokers |
Most of these are not deliberate. They are the natural outcome of a system where the burden is entirely manual, and the summary row is worth reading twice: SKAT receives nothing from foreign brokers on its own. Every line of the table above traces back to that single fact.
Staying Organised
The good news is that the entire problem is a record-keeping problem, and record-keeping is a solved discipline:
- Keep all purchase receipts and transaction confirmations. Store them digitally with dates and amounts.
- Use a spreadsheet to track your holdings. Record every purchase, sale, dividend and currency conversion, including the DKK value at the time of each transaction.
- Report promptly. Don’t wait until the deadline. File your E-tax return as soon as you have the information in front of you.
- Check your broker’s year-end reports. Most foreign brokers provide annual statements summarising your activity — use these as a starting point, but verify the figures yourself.
- Consult a tax advisor if your holdings are complex. Multiple countries, multiple currencies, and options or derivatives add layers of complexity that may warrant professional help.
Holding shares in a foreign custody account gives you access to a wider range of investments, but the price of admission is a permanent, self-managed reporting obligation. Report purchases on time, work out your own gains and losses, place dividends and foreign tax credits in the right boxes, and never skip the year-end market value declaration. Miss any of these and you invite penalties and lost deductions; handle them steadily and the account remains a perfectly sensible part of a Danish tax picture.