Taxation of Securities in Foreign Deposits

Tax rules and reporting obligations‍

Many taxpayers hold securities in foreign accounts. Tax-wise, gains and losses are treated the same as if the securities were in a Danish account. The difference is that SKAT automatically receives information from Danish banks, investment funds, and investment companies about gains and losses realized during the year. For securities held abroad, however, it is the investor’s responsibility to calculate and report these to SKAT, as no automatic reporting takes place.

To claim deductions for losses on foreign-held securities, you must report details of each acquisition—including date, purchase price, number of shares, and identification—before the annual tax filing deadline (July 1 of the following year). For new residents, the year of entry is considered the acquisition year.

You must report the following details to SKAT:

• Identification of the securities (e.g., ISIN)

• Quantity

• Acquisition date

• Purchase price including fees

• Market value as of December 31 (for shares and equity-based investment funds)

There have been several cases where SKAT has denied loss deductions for foreign individuals moving to Denmark because they did not report these details on time. It is solely the investor’s responsibility to comply, and late reporting typically results in the loss of the right to deduct losses.

Dividend taxation on foreign shares‍

Dividends received from securities held abroad must also be reported to SKAT. For Danish securities, withholding tax is automatically deducted at the source. For foreign-held securities, you must declare both the gross dividend and any foreign withholding tax paid. Double tax treaties usually cap withholding tax at 15%. To avoid double taxation, you must ensure your foreign investment broker has correctly registered your Danish tax residency; otherwise, excessive withholding tax may occur.

Contact us today‍

SkatteInform provides advisory -and assistance services to clients with foreign securities deposits. We help ensure that the correct tax is paid, that reporting requirements are met, and that you are not subject to double taxation.

Frequently Asked Questions

1. What are the reporting requirements for foreign securities with SKAT?

If you are fully tax resident in Denmark and own listed securities in a foreign deposit, you are required to report acquisition details to SKAT if you wish to maintain your right to deduct future losses. These details must be submitted no later than July 1 of the year following the acquisition. Reporting can be done manually through your tax file or directly via SKAT’s securities system. The report must include identification (e.g., ISIN), quantity, purchase date, acquisition cost including fees, and market value as of December 31.

SkatteInform can assist with calculation and reporting of securities in foreign deposits.

2. Do I need to report both gains and losses on foreign securities?

Yes. As the taxpayer, you are responsible for reporting both gains and losses from foreign investment accounts, since these are not automatically reported to SKAT. The figures must be entered in the correct boxes in your annual tax return in TastSelv. Inconsistent or unusual reporting—such as amounts differing significantly from prior years—may trigger a SKAT review and delay your tax assessment or refund. Note that securities can be taxed under either the realization principle or taxation of unrealized gain/loss of the year, and it is your responsibility to apply the correct method.

SkatteInform can assist with proper calculation and reporting.

3. Do dividends from foreign securities also need to be reported and taxed?

Yes. Dividends from securities in foreign deposits must be reported to SKAT, including the amount of foreign withholding tax. Dividends are taxed in Denmark as share income at 27% on the first DKK 67,500 (2025 threshold) and 42% on amounts above this. For married couples, the combined threshold is DKK 135,000. You may claim a credit against Danish tax equal to the foreign tax paid, either under Danish domestic rules or under a double tax treaty (typically limited to 15%).

SkatteInform can advise on tax relief for foreign withholding tax and help with dividend reporting.

4. What happens if I fail to report my foreign securities on time?

If you fail to report acquisitions by July 1 of the following year, you will generally lose the right to deduct losses. However, SKAT will still tax realized gains. This makes timely reporting critical, as missing the deadline may result in taxation of gains without the ability to offset losses.

SkatteInform can help ensure all reporting is timely and correct.

5. What documentation must I provide in case of a SKAT audit?

During an audit, SKAT will typically request the following:

• Proof of purchase (receipts or investment account statements with date, quantity, ISIN, price, and fees)

• Information on dividends received, including documentation of foreign withholding tax

• Market value as of December 31 (for unrealized gains/losses)

SKAT increasingly demands thorough documentation for foreign investments, making proper record-keeping essential.

SkatteInform can assist with reviewing and organizing documentation, as well as calculating gains and losses.

Disclaimer:

The above is for guidance only. SkatteInform assumes no liability for actions taken based on this information without prior individual advice. We also accept no liability for errors or omissions.