K/S companies explained

Through the K/S company mechanism, Danish legislation provides the opportunity of registering and using Danish enterprises with a zero rate of tax. The K/S is a limited partnership, having no less than two partners. One of the partners is a general partner, while the other partner(s) has/have the status of limited partners.

For taxation purposes a Danish K/S with foreign partners and which does not carry out business in Denmark is not liable for tax in Denmark. Under Danish tax law, a K/S is not regarded as a taxable person in its own right (and accordingly, is not required to obtain a taxpayer registration number in Denmark), but the profits derived by a K/S are taxable in the hands of its partners (i.e. the general partner and the limited partner/s) according to their country of residence, in the proportion of their interests in the K/S. TST