Denmark R&D Tax Credits and Super-Deduction Guide

Super-Deduction Rates by Year

The enhanced R&D super-deduction (forskningsfradrag) allows you to deduct a percentage above 100% of your qualifying R&D costs. The rate structure phases in over 2025–2028:

• 2025: 108% deduction (deduct 108 DKK for every 100 DKK spent)
• 2026: 112% deduction (deduct 112 DKK for every 100 DKK spent)
• 2027: 116% deduction (deduct 116 DKK for every 100 DKK spent)
• 2028 onwards: 120% deduction (deduct 120 DKK for every 100 DKK spent)

The super-deduction is calculated on qualifying R&D costs and reduces your taxable income. For a company paying 22% corporate tax, the effective benefit per 100 DKK spent is: 1.76 DKK (2025), 2.64 DKK (2026), 3.52 DKK (2027), 4.40 DKK (2028). For loss-making companies, the cash payout (skattekredit) provides immediate liquidity.

Legislative basis: The super-deduction is governed by LL (Ligningsloven) §8 X, introduced as part of the 2024 tax reform (Aftale om fremtidens skattevæsen and the 2024 Danish Budget). The rates are fixed by law and indexed to inflation adjustments.

Qualifying R&D Activities

Definition: Qualifying R&D follows the OECD Frascati Manual definition, which requires: (a) novelty — the activity aims to achieve new knowledge or create new or improved products/processes that are not readily available to the company, (b) creativity — the activity is based on original concepts and hypotheses, (c) uncertainty — the outcome is not known in advance (it is not routine development), (d) systematic — the activity is carried out in a planned, organised manner, and (e) transferable — the results can be reproduced or applied.

Examples of qualifying activities: Basic research (fundamental scientific research without immediate commercial application), applied research (investigation directed at a specific practical aim), experimental development (systematic work drawing on existing knowledge to produce new products, processes, or services), software R&D (new algorithms, significant architectural improvements, solving technical uncertainties — not routine coding or UI changes), pharmaceutical clinical trials (new drug development, new indications), engineering R&D (new manufacturing processes, materials testing, prototype development), agricultural and biotech R&D (new crop varieties, genetic research, fermentation process development), and green technology R&D (carbon capture, renewable energy, battery technology, new materials for sustainability).

Non-qualifying activities: Routine market research, routine software development (bug fixes, minor UI updates, standard website development), market surveys, brand development, routine quality control and testing (unless novel), training and education (unless it is itself the subject of R&D), and capital expenditure on plant and buildings (these are not R&D costs for the super-deduction, though they may qualify for other incentives).

Eligible Costs

Staff costs: Salaries, wages, and related costs (pension contributions, AM-bidrag, A-skat) for employees directly engaged in R&D activities. You must track time spent on R&D vs non-R&D activities — time sheets are the most common method. Staff costs are the largest qualifying cost category for most companies. The R&D time allocation must be reasonable and documented.

External R&D costs: Payments to third parties for R&D services performed on your behalf — e.g., contract research organisations (CROs), university research departments (under GTS — Godkendt Teknologisk Service), and external labs. The external provider must be performing actual R&D work, not routine testing or production. The costs are qualifying if the R&D is performed for your benefit and you bear the economic risk. If the external provider retains the IP rights, the costs may not qualify — check the contractual terms.

Non-capitalised materials and consumables: Raw materials, chemicals, prototypes, test equipment (if not capitalised), 3D printing materials, and other consumables used in R&D. Capitalised equipment (e.g., a new lab machine capitalised as a fixed asset) is not eligible — but the depreciation of that equipment may be deductible under normal rules.

Software and cloud computing: SaaS subscriptions, cloud computing resources (AWS, Azure, GCP), and software licences used directly for R&D can qualify if they are consumed in the R&D process. General business software (Office 365, Slack) does not qualify. Cloud computing for R&D (e.g., GPU compute for AI training) is increasingly scrutinised — maintain clear documentation linking cloud usage to specific R&D projects.

Non-eligible costs: Capital expenditure (machinery, buildings, land), general overheads (rent, utilities, administrative salaries), marketing and sales costs, IP acquisition costs (buying existing patents), and financing costs (interest on R&D loans).

Cash Payout (Skattekredit) for Loss-Making Companies

How it works: If your company has a tax loss (negative taxable income) and cannot use the super-deduction to reduce current tax, you can apply for a cash payout — skattekredit. SKAT pays you the value of the unused super-deduction in cash, calculated at the corporate tax rate of 22% up to a maximum deductible basis of 25 million DKK per year (increasing to 35 million DKK from 2027). The maximum annual cash payout is: 25M × 22% × (super-deduction% − 100%) = e.g., 25M × 22% × 8% = ~440,000 DKK for 2025.

Eligibility: Any company subject to Danish corporate tax (selskabsskat) can apply, provided: (a) the company has a tax loss for the year, (b) the company has qualifying R&D costs, (c) the cash payout claim is filed with the annual corporate tax return (selvangivelse for selskaber), and (d) the company is not in bankruptcy or under compulsory dissolution. There is no minimum R&D spend — even small companies with modest R&D costs can claim.

Application process: File the cash payout claim as part of the annual corporate tax return by 1 July of the year following the income year. The claim is made through the R&D portal on TastSelv Erhverv (Skatteguiden for R&D). SKAT processes the claim and pays the cash amount within approximately 30 days of receiving the tax return (if no further review is needed). In practice, SKAT may take 2–3 months for initial claims while they verify the R&D qualification.

Documentation for cash payout: The same documentation requirements apply as for the super-deduction (see section below). SKAT has a dedicated R&D team that reviews claims — if they reject the claim, you can appeal through the standard appeals process (see our Tax Audit and Appeals Guide →).

Documentation and Compliance

R&D project documentation: For each R&D project, maintain: a project description (objective, scientific or technical uncertainty, methodology), the start and end dates of the R&D phase, detailed cost breakdown (staff, external, materials), time sheets or equivalent records for staff, progress reports, and any relevant patents, publications, or technical reports. The documentation should demonstrate that each project meets the Frascati criteria and show the link between costs and the specific R&D project.

Application filing: The super-deduction is claimed on the annual corporate tax return. Companies must complete a separate R&D appendix (bilag til forskningsfradrag) with the return, detailing qualifying costs by category. The appendix is filed digitally through TastSelv Erhverv.

SKAT review and audits: SKAT's R&D team may request additional documentation or conduct a field audit. Focus areas include: whether the activity qualifies as R&D (vs routine development), the reasonableness of the R&D time allocation for staff, the eligibility of external R&D costs (especially payments to universities and CROs), and the existence (or absence) of proper project documentation. If SKAT rejects costs, the excess deduction is reversed with interest. For intentionally inflated claims, penalties apply (up to 100% of the tax benefit). For more on SKAT audits, see our Tax Audit and Appeals Guide →.

Record retention: R&D documentation must be retained for 5 years from the end of the financial year. Given the complexity of R&D claims, retain records for at least 6 years to cover any potential SKAT review lag.

Interaction with Other Incentives

R&D super-deduction + IP taxation: The super-deduction applies at the R&D stage. IP income from the resulting patents, software, or technology is taxed at the standard 22% corporate rate — Denmark has no patent box. The enhanced deduction makes the effective tax cost of R&D negative for loss-making companies (due to the cash payout). For IP income taxation, royalty WHT, and transfer pricing, see our IP and Royalty Tax Guide →.

Innovation Fund Denmark and EU grants: R&D grants from Innovation Fund Denmark, EU Horizon Europe, or other public bodies are considered taxable income and reduce the qualifying R&D costs for the super-deduction calculation. If 100% of your R&D costs are covered by a grant, you cannot claim the super-deduction on those costs. If only partially funded, the super-deduction applies to the net cost (total cost minus grant). The grant income itself is taxable at 22%.

Group companies: Each group company claims the super-deduction individually based on its own R&D costs. Costs cannot be transferred between group companies. However, the cash payout is available per company, so multiple group companies can each claim up to the 25 million DKK cap. For group structuring and sambeskatning (joint taxation), see our Holding Companies Guide →.

Joint R&D (joint ventures and consortia): If two or more companies collaborate on an R&D project, each company claims its own share of the costs. The cost allocation should follow the contractual agreement and reflect the actual economic contribution of each party. SKAT may scrutinise joint R&D arrangements to ensure costs are not double-counted or artificially allocated to a loss-making company to claim the cash payout.

Related Guides

• Business Expenses and Deductions Guide → — general business deductions, R&D basics
• Business Tax Return Guide → — corporate tax return, selvangivelse, filing
• IP and Royalty Tax Guide → — IP income, royalty WHT, patent taxation
• Starting a Business Guide → — VSO, business registration, CVR
• Holding Companies Guide → — group structuring, sambeskatning
• Tax Audit and Appeals Guide → — SKAT audits, appeals, binding rulings