Denmark

Investment & Operational Criteria

Key Indicators

Risk Premia

4.375

%

Outlook

Uncertain

Rating

A|1S|§

Ranking

10

Reserves (1P)

Total

mm boe

Oil

71

%

Summary

Denmark, while a high cost area, has maintained a stable fiscal environment, which remains competitive in comparison to its European peers.

Updated

May 29, 2021

Country Basics

Region

Europe - North West

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

DenmarkDenmark

Northern Europe, bordering the Baltic Sea and the North Sea, on a peninsula north of Germany (Jutland); also includes several major islands (Sjaelland, Fyn, and Bornholm).

Outline

Tax Regime
Type

Concession

Tax Regime
Notes

Danish resident companies are subject to tax in accordance with a modified territoriality principle, which means that income and expenses from foreign permanent establishments (PEs) and real estate outside Denmark are not included in the income of a Danish resident company. The tax regime a consists of a combination of corporate income tax and hydrocarbon tax combined with a special hydrocarbon tax allowance. In general, companies engaged in oil and gas activities are subject to the generally applicable Danish tax rules applicable to Danish companies and branches, with the adjustments provided in the Hydrocarbon Tax Act and the Hydrocarbon Tax Assessment and Collection Act.

Investment & 
Operational
Climate

Denmark is regarded by many independent observers as one of the world’s most attractive business environments and is characterized by political, economic, and regulatory stability. It is a member of the European Union (EU) and Danish legislation and regulations conform to EU standards on virtually all issues. It maintains a fixed exchange rate policy, with the Danish Krone linked closely to the Euro. Denmark is a social welfare state with a thoroughly modern market economy, heavily driven by trade in goods and services. Exports account for about 55% of GDP. Economic conditions in its major trading partners – Germany, the United States, Sweden and the UK – have substantial impact on Danish national accounts.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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