Will you receive a fine if you do not report taxable income, VAT, or duty properly?

If you pay your taxes, VAT or duties late, the tax or duties that have not been reported will be subject to interest. The collection interest rate is currently 6.75% (2025). Since 1 January  2020, there has been no deduction allowed for collection interest. In addition, you may face a criminal case, where—in addition to the tax or duty payment and the interest—you will also have to pay a fine, and in the worst case, the matter may result in imprisonment.

The rules on penalties were changed with effect from 1 January  2024.

The changes mean that no penalty liability will be enforced in first-time cases if the evasion does not exceed DKK 20,000. If the evasion is between DKK 20,000 and DKK 40,000, the case will—in first-time cases—be closed with a DKK 5,000 fine.

In case of gross negligence, the fine will in principle be set at one time the total evaded amount.

In case of intent to evade not exceeding DKK 500,000, the fine will be calculated as two times the total evaded amount.

Example where the “time of offense” is after 1 January 2024:

A taxpayer has intentionally evaded DKK 100,000 in tax. The fine will therefore be DKK 200,000.

A taxpayer has evaded DKK 100,000 in tax through gross negligence. The fine will therefore be DKK 100,000.

If the “time of offense” was before 1 January 2024, evaded amounts that do not exceed DKK 60,000 will be calculated as one time the evaded amount in cases of intent, and as half the evaded amount in cases of gross negligence.

Example where the “time of offense” is before 1 January 2024:

The taxpayer has intentionally evaded DKK 100,000 in tax. The fine will therefore be (DKK 60,000 × 1) + (DKK 40,000 × 2) = DKK 140,000.

The taxpayer evaded DKK 100,000 in tax due to gross negligence. The fine will therefore be (DKK 60,000 × 0.5) + (DKK 40,000 × 1) = DKK 70,000.

Remember: In many situations, you can avoid both fines and imprisonment for evasion.

For example, self-reporting a gross negligent tax evasion may be exempt from punishment in Denmark, whereas you can expect a fine if the matter is uncovered by the Danish Tax Agency (Skattestyrelsen).

If the Danish Tax Agency has initiated an audit, we strongly recommend that you contact a lawyer or advisor as soon as possible. Unfortunately, an audit of unreported income often ends with a subsequent liability case involving demands for fines and imprisonment.

The best approach is therefore to be proactive and clarify any potential tax consequences of a given matter in a timely manner. Due diligence is highly recommended also in the context of taxation.