Denmark Tax Litigation and Courts Guide

Landsskatteretten (Tax Tribunal)

What it is: Landsskatteretten is the independent administrative appeal body for tax cases. It is not a court — it is an administrative tribunal that reviews SKAT decisions on the merits. You must appeal to Landsskatteretten before taking a case to court (exhaustion of administrative remedies). The tribunal is composed of a chair (a judge) and two members — one appointed by the Ministry of Taxation and one appointed by professional organisations (tax advisers, business organisations). The members have tax expertise. The tribunal can: uphold SKAT's decision, reverse it, or modify the assessment. It cannot award costs or damages. Landsskatteretten has jurisdiction over all direct taxes (personal tax, corporate tax, VAT, customs, excise duties, payroll tax, property tax, and penalties). For more on the appeals process before reaching Landsskatteretten (including the 3-month deadline, the appeal fee, and the required documentation), see our Tax Audit and Appeals Guide →.

Processing time: Landsskatteretten's average processing time is approximately 12–18 months from filing to decision. Simple cases (single issue, agreed facts) may be decided in 6–9 months. Complex cases (transfer pricing, international tax, large groups) can take 24–36 months. The tribunal publishes its decisions (anonymised) on skat.dk — these are an important source of tax guidance and are cited by SKAT and the courts. The decisions are not binding precedent (Denmark does not have a formal doctrine of precedent), but they carry significant persuasive weight and are followed by SKAT in similar cases unless overturned by a court.

Types of hearings: Most cases are decided based on written submissions only (no oral hearing). You can request an oral hearing, which Landsskatteretten may grant if the case involves significant factual disputes or complex legal questions. Oral hearings are conducted in Danish. The taxpayer can be represented by a tax lawyer (advokat), a revisor (accountant), or directly by the taxpayer. If the amount in dispute is less than ~200,000 DKK, the tribunal may decide the case with a single member (the chair) instead of the full three-member panel.

Court Proceedings

When to go to court: You can take a case to court if: (a) you have exhausted the Landsskatteretten appeal (you received a decision and disagree with it), or (b) you have a legal question that cannot be resolved through the administrative process (rare). Cases are filed in the district court (byret) for simple cases or the Maritime and Commercial Court (Sø- og Handelsretten) for complex cases (large corporate groups, transfer pricing, international tax, shipping tax, financial sector tax). The Sø- og Handelsretten has specialised tax judges and is the preferred forum for high-value or complex tax disputes. The time limit for filing a court case is 6 months from the date of the Landsskatteretten decision (or from the date you received notification of the decision). Missing this deadline means you lose the right to challenge the decision in court (unless SKAT accepts a late filing, which is rare).

Case types: Principle cases (principalssager): cases that raise a new or important legal question and may affect many taxpayers. SKAT and the courts often select a single test case to set a precedent. Small claims (småkrav): cases involving less than ~100,000 DKK may be subject to simplified procedures with lower costs. Group cases: if the same issue affects multiple taxpayers (e.g., the tax treatment of a specific investment product), the court may consolidate cases. CJEU references: if the case involves EU law (VAT directives, state aid, fundamental freedoms), the court may refer questions to the CJEU (see next section). The trial is adversarial (the taxpayer vs SKAT). Each party presents written submissions and may call expert witnesses. The trial is conducted in Danish. The court decision includes: the factual findings, the legal reasoning, and the conclusion (whether the taxpayer's or SKAT's position prevails, and the amount of tax at stake).

Appeals: The decision of the district court or Sø- og Handelsretten can be appealed to the High Court (Landsretten) within 4 weeks of the decision. The High Court's decision can be appealed to the Supreme Court (Højesteret) within 4 weeks, but Supreme Court leave is required (the case must be of general public importance or involve a fundamental legal question). The Supreme Court grants leave in approximately 5–10% of tax cases. The average duration from filing at the district court to final Supreme Court decision is approximately 3–5 years. A fast-track procedure (acceleration) is available in exceptional cases (if the case involves a question of urgent public importance or if the taxpayer faces serious financial hardship).

CJEU References (EU Law)

When a reference is made: Danish courts can refer questions of EU law interpretation to the Court of Justice of the European Union (CJEU) under Article 267 TFEU. This is mandatory for the Supreme Court (as the court of last instance) if a question of EU law is relevant to the case and the answer is not clear (acte clair). The district court and Landsskatteretten cannot make CJEU references — only the High Court and Supreme Court can. The CJEU reference procedure adds approximately 18–24 months to the litigation timeline. The CJEU's decision on the EU law question is binding on the Danish court, which then applies it to the specific facts of the case.

Common tax issues referred to the CJEU: VAT directives (place of supply, exemptions, deduction rights), fundamental freedoms (free movement of capital, freedom of establishment — relevant for cross-border tax cases), state aid (tax advantages that constitute illegal state aid), the Anti-Tax Avoidance Directive (ATAD — interest limitation, CFC rules, GAAR), and the EU Parent-Subsidiary Directive, Interest & Royalty Directive, and Merger Directive. Recent Danish tax CJEU cases include: Københavns Lufthavne (C-138/18) — VAT on airport services; GN Hearing (C-448/21) — interest deduction limitation for cross-border loans; and Skatteyderforeningen (C-243/23) — CJEU is pending on the compatibility of the Danish CFC rules with EU law. If your case involves an EU law question, your litigation team should include a lawyer with EU law expertise.

Costs and Funding

Court fees: Filing a tax case in the district court costs approximately 3,000–5,000 DKK (depending on the amount at stake). The Sø- og Handelsretten filing fee is approximately 5,000–10,000 DKK. High Court and Supreme Court appeal fees are approximately 10,000–20,000 DKK. There is no fee for the Landsskatteretten appeal (only the initial appeal fee of ~1,300 DKK submitted to SKAT).

Adversarial costs: Denmark follows the loser pays principle — the unsuccessful party must pay the successful party's legal costs (including lawyers' fees, expert witness costs, and court fees). The costs are not fully compensatory — the court awards costs based on a standardised scale (takstsystemet), which may be significantly lower than actual legal fees. Typical cost awards: small cases (under 100,000 DKK at stake) — 20,000–50,000 DKK; medium cases (100,000–1,000,000 DKK) — 50,000–250,000 DKK; large cases (over 1,000,000 DKK) — 250,000–1,000,000 DKK+. If you win, you recover these costs from SKAT. If you lose, you pay SKAT's costs (plus your own). The cost risk is real — most taxpayers purchase litigation insurance (retssikringsforsikring) before a dispute arises. Many home insurance and business insurance policies include legal expenses cover (retssikringsforsikring) that covers tax disputes up to ~500,000 DKK. Check your insurance policy before litigation begins — coverage is often limited to pre-litigation advice or Landsskatteretten proceedings only.

Third-party funding: Third-party litigation funding is available for tax cases in Denmark (from funders like Omni Bridgeway, Burford Capital, or Danish litigation funders). The funder pays the legal costs in exchange for a share of the recovery (typically 20–40%). Third-party funding is most suitable for high-value cases (over 5,000,000 DKK at stake) with a strong legal basis and a solvent defendant (SKAT is always solvent). The Danish courts have generally accepted third-party funding, but the funder cannot control the litigation strategy or settlement decisions (the taxpayer retains control).

Litigation Strategy

Binding ruling first: Before litigation, consider applying for a binding ruling (bindende svar) from SKAT on the specific tax question. If SKAT's binding ruling is unfavourable, you can appeal it to Landsskatteretten — this is often faster and cheaper than litigation after an audit assessment. For more on binding rulings, see our Tax Audit and Appeals Guide →.

Pay under protest: If SKAT has issued a tax assessment demanding payment, you should generally pay the disputed amount under protest (betale under protest) while pursuing the appeal. This stops interest from accruing at the penalty rate (approximately 7.5% annually vs the standard 3.5%). You can later claim a refund if you win. If you cannot pay, you can apply for a deferral (henstand) from SKAT — SKAT may grant it if you provide security (bank guarantee or a mortgage on property). For more on payment obligations, see our Tax Debt Collection Guide →.

Choosing a representative: Tax litigation in Denmark is conducted by specialised tax lawyers (skatteadvokater) or state-authorised accountants (statsautoriserede revisorer) with litigation experience. The leading Danish tax litigation firms include: Kromann Reumert, Bech-Bruun, Plesner, Gorrissen Federspiel, Accura, and several boutique tax litigation firms. When choosing a representative, consider: their experience with the specific tax issue (transfer pricing, VAT, international tax, etc.), their track record in court (not just Landsskatteretten), and their language ability (if you prefer English, confirm that the team can conduct the proceedings in English with the court's permission — Danish courts generally conduct proceedings in Danish, but English-language materials are accepted with Danish translations).

Related Guides

• Tax Audit and Appeals Guide → — SKAT audits, administrative appeals, binding rulings
• Tax Debt Collection Guide → — payment obligations, deferrals, interest
• Tax Assessment Notice Guide → — understanding your årsopgørelse
• Tax Treaties Guide → — MAP, mutual agreement procedure as alternative to litigation
• Personal Tax Guide → — income tax, rates, personal liability