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Financial Participation

In Denmark up to the end of 2011 there were tax incentives for different kinds of employee financial participation. These regulations were largely abolished on 1 January 2012.

In accordance with §7A of the taxation law, up to 2012, it was possible to deposit preference shares in trust with a bank for five years. The value of the shares was not permitted to exceed 10% of an employee’s annual wages or salary. No tax was due when the employee actually received the shares, though any profit deriving from their sale after the holding period is taxable. The company itself was able to subtract its costs for the shares issued to its employees from its corporation tax base.


On 1 January 2012 these regulations were largely abolished. Since then share options and shareholding schemes have been taxed from the day of issue. Profits from exercising share options is taxed as income with a maximum tax rate of 56%.1 The new regulations apply to shareholding or similar participation starting on 1 January 2012 or later. Share option schemes can be agreed either individually or collectively.2

Wilke, Maack and Partner (2014) Country reports on Financial Participation in Europe. Prepared for www.worker-participation.eu. Reports first published in 2007 and fully updated in 2014.