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Denmark Non-Profit and Charitable Organisation Tax Guide

Danish tax rules for non-profits, charitable organisations, §8A and §13 exemptions, fundraising VAT, FO-bygninger, donation deductions, and cross-border charitable giving — all amounts in DKK.

Denmark provides a range of tax exemptions and reliefs for non-profit and charitable organisations (almene velgørende organisationer). The two main tax exemption provisions are §8A of the Corporate Tax Act (exemption for certain non-profit entities) and §13 of the Tax Assessment Act (deductibility of donations for donors). An organisation must be approved by SKAT (Skattestyrelsen) to qualify for these benefits. The approval process includes review of the organisation's purpose, activities, and governance. Charitable organisations that meet the criteria are exempt from corporate income tax on their charitable activities, but may be taxable on commercial activities and investment income. Fundraising and certain commercial activities can trigger VAT obligations even for exempt organisations. FO-bygninger (non-profit housing foundations) have their own specific rules. This guide covers the §8A exemption criteria, the approval process, §13 donation deduction rules for donors, VAT treatment of non-profit activities, fundraising and sponsorship rules, FO-bygninger, cross-border charitable giving, and compliance obligations. For related topics, see our Foundations Guide →, Business Tax Return Guide →, VAT Registration Guide →, and Payroll Tax Guide →.

§8A Exemption — Corporate Income Tax

§8A of Selskabsskatteloven: This provision exempts certain non-profit organisations from corporate income tax on income derived from activities that directly support the organisation's charitable purpose. To qualify, the organisation must: (a) have a charitable or public-benefit purpose (almene velgørende eller på anden måde almennyttige formål), (b) be non-profit — any surplus must be used exclusively for the charitable purpose and not distributed to members or founders, (c) be independent — not controlled by private individuals for their own benefit, and (d) have its charitable purpose reflected in its actual activities — at least 80% of its activities should directly support the charitable purpose.

What is exempt: Income from: membership fees (kontingent), donations and voluntary contributions, fundraising events (if structured as donations), government grants for charitable activities, and income from activities that are incidental to the charitable purpose (e.g., a charity shop run by volunteers). Rental income from property used exclusively for charitable activities is also exempt if the property is not held as a commercial investment.

What is NOT exempt (taxable at 22%): Commercial activities that are not directly related to the charitable purpose — e.g., selling advertising space, running a profitable cafe open to the public (not just members), renting out property at market rates as a commercial landlord, and investment income from shares, bonds, and other financial assets (unless the investments are held as part of the charity's endowment and the income is used for charitable purposes — this is a grey area requiring specific SKAT approval). Speculative income (trading in securities, real estate development) is always taxable.

Approval process: Apply to SKAT's §8A team (Skattestyrelsen, Sektor for Selskaber og Fonde). Submit: the organisation's articles of association (vedtægter), a description of activities, annual accounts (or projected accounts for new organisations), a detailed explanation of how the organisation meets the §8A criteria, and a statement confirming that no profits will be distributed to founders/members. SKAT typically processes applications within 3–6 months. If approved, SKAT issues a binding ruling confirming the exemption. The approval is valid indefinitely but SKAT can revoke it if the organisation's activities change materially.

§13 Donation Deduction — Donor's Tax Relief

§13 of Ligningsloven: Donations to SKAT-approved charitable organisations are deductible for the donor. For individuals: donations up to ~16,600 DKK per year (2026 level, indexed annually) are deductible at the marginal tax rate (up to 52.06%). For companies: donations are deductible as a business expense (22% corporate tax benefit) up to the same ~16,600 DKK limit. The deduction is per taxpayer, not per charity — you can donate to multiple organisations and claim up to the total limit. The charity must provide a receipt (anerkendelse) confirming the donation, the date, and the organisation's SKAT approval number. Donations above the ~16,600 DKK limit are not deductible, but are not subject to gift tax for the recipient (the charity is exempt).

List of approved organisations: SKAT maintains a public register of approved §13 charitable organisations on skat.dk. As of 2026, approximately 1,500 organisations are listed. Organisations must apply for §13 approval separately from §8A approval — an organisation can have one without the other. To apply, submit the same documentation as for §8A plus a declaration that donations will be used exclusively for charitable purposes. SKAT processes §13 applications within 2–4 months.

Sponsorship vs donation: A sponsorship (where the donor receives advertising, branding, or other commercial benefit in return) is NOT a deductible donation under §13 — it is treated as a marketing expense for the sponsor and as taxable income for the charity. The distinction is important: a genuine donation has no material benefit to the donor, while sponsorship provides commercial value. If your organisation offers sponsorship packages (e.g., "Gold Sponsor — logo on website"), the income is taxable and VAT may apply.

VAT for Non-Profit Organisations

General rule: Non-profit organisations are subject to the same VAT rules as commercial businesses — if their taxable turnover exceeds 50,000 DKK in any 12-month period, they must register for VAT. However, certain types of income are VAT-exempt: membership fees (if the membership gives no direct individual benefit — only collective benefits), government grants for specific projects (if not consideration for a supply), and donations (if purely voluntary, no consideration). Fundraising events (lotteries, charity auctions, sponsored runs) are generally VAT-exempt if the amount raised is genuinely charitable and the event is organised by volunteers. However, regular commercial activities (running a cafe, selling merchandise, renting event space) are taxable at 25%.

VAT deduction rights: A non-profit organisation that is not VAT-registered cannot deduct input VAT on its purchases. This means the VAT paid on rent, utilities, equipment, and supplies is a real cost. If the organisation has some taxable activities and some exempt activities, it can only deduct input VAT in proportion to its taxable activities (pro-rata deduction). Partial exemption rules apply — if taxable activities are less than 50% of total activities, the VAT deduction may be restricted or calculated using a sector-by-sector method. For most charitable organisations, operating entirely outside the VAT system is simpler but less efficient (unrecovered VAT is a cost).

Volunteer labour: Volunteer services provided to a charity are outside the scope of VAT — no VAT is due on volunteer work, and the charity does not need to account for VAT on the imputed value. This is a significant advantage over paid labour (which bears 25% VAT in the charity's costs). If a charity pays volunteers a small stipend (below ~15,000 DKK/year), the stipend may be considered a charitable payment rather than salary — check with SKAT to avoid A-skat and AM-bidrag obligations. For more on payroll obligations, see our Payroll Tax Guide →.

Payroll Tax (Lønsumsafgift) for Non-Profits

Who is liable: Non-profit organisations that sell VAT-exempt services (e.g., healthcare, education, social services, cultural activities) may be liable for payroll tax (lønsumsafgift) instead of VAT. The tax is calculated on the organisation's total salary costs (including AM-bidrag) at a rate of ~4.6% (the standard rate for most VAT-exempt activities). The first ~80,000 DKK of salary costs per year is exempt. If the organisation provides both taxable (VAT) and exempt activities, it must apply the payroll tax only to the exempt portion. Charitable organisations providing social or cultural services under a government contract are often exempt from payroll tax if the service is funded by public authorities. For more on payroll tax, see our Payroll Tax Guide →.

FO-Bygninger (Non-Profit Housing)

FO-bygninger (Foreningsejede og Organisationsejede bygninger): Non-profit organisations that own buildings used for their charitable activities (e.g., community centres, sports halls, youth clubs, cultural venues) may qualify for reduced property tax and exemption from ejendomsværdiskat (property value tax). The building must be owned by the organisation and used primarily (more than 50% of the time) for non-commercial, non-profit activities. If part of the building is rented out commercially, the exemption is proportionally reduced. The exemption is not automatic — you must apply to your municipality through the property assessment system (vurderingsportalen). The municipality assesses whether the building qualifies as an FO-bygning. If approved, the organisation pays only grundskyld (land tax) at the reduced rate for non-commercial properties. For more on property tax, see our Property Tax Guide →.

Cross-Border Charitable Giving

Donations to foreign charities: Donations to non-Danish charities are generally not deductible for Danish donors under §13. However, an exception applies for charities established in EU/EEA countries if the charity would meet the Danish §13 criteria (same charitable purpose, non-profit requirement, no distribution of profits). The foreign charity must provide equivalent documentation (articles of association, accounts, and a declaration equivalent to §13 requirements). In practice, SKAT has been restrictive — you should apply for a binding ruling before relying on this exception. Donations to charities outside the EU/EEA are not deductible.

Danish charity receiving foreign donations: A Danish §13-approved charity can receive donations from foreign donors without Danish tax consequences (the charity is exempt). The foreign donor's tax treatment depends on their home country's rules. If the foreign donor is a resident of a country with which Denmark has a tax treaty, the donation may be deductible in the donor's country if the charity qualifies as a charitable organisation under that country's rules. The charity may need to provide documentation to the foreign donor's tax authority.

Compliance and Reporting

Annual corporate tax return: Even if exempt under §8A, the organisation must file an annual corporate tax return (selvangivelse for fonde og foreninger) confirming that its activities have not changed and that the exemption conditions are still met. The return is due 1 July of the year following the income year. If the organisation had any taxable income (commercial activities, investment income), it must report and pay tax on that portion.

Donation receipts: The organisation must issue receipts for all deductible donations and maintain a register of donors and donation amounts. Receipts must be issued by 31 January of the year following the donation year. SKAT may request the donor register for audit purposes.

Changes in activities: If the organisation's activities change materially (e.g., it starts a large commercial operation, merges with another organisation, or changes its articles of association), it must notify SKAT immediately. SKAT may reassess the §8A/§13 approval. Failure to notify can result in revocation of the exemption and back-tax for up to 3 years.

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