Airbnb Tax Rules for Denmark 2025: Complete Guide for Hosts

Denmark's tax landscape for short-term rentals has evolved significantly in 2025, with new regulations affecting how Airbnb hosts report income and comply with local requirements. Whether you're a seasoned host or just starting out, understanding these rules is crucial to avoid penalties and maximize your rental income legally.

Understanding the 2025 Tax Framework

Denmark has implemented stricter reporting requirements for short-term rental platforms and hosts. The Danish Tax Agency (SKAT) now receives automatic reports from platforms like Airbnb, making compliance more important than ever.

Key Changes in 2025

• Automatic reporting: Airbnb reports all host earnings directly to SKAT
• Lower tax-free threshold: Reduced from DKK 50,000 to DKK 30,000 annually
• Stricter documentation: Enhanced record-keeping requirements
• Municipal registration: Mandatory registration in most Danish cities
• Tourist tax collection: Hosts must collect and remit tourist taxes

Income Tax on Airbnb Earnings

Your Airbnb income is subject to Danish income tax, but the rate depends on several factors including your total annual income and whether you're renting out your primary residence or an investment property.

Tax Rates for 2025

• Primary residence (up to DKK 30,000): Tax-free
• Primary residence (above DKK 30,000): Standard income tax rates apply
• Investment property: Full income tax on all earnings
• Business operation: Corporate tax rates may apply

The Primary Residence Exception

If you're renting out your primary residence, you can earn up to DKK 30,000 tax-free annually. However, strict conditions apply:

Requirements for Tax-Free Income

• The property must be your registered primary residence
• You must live there for at least 6 months per year
• Maximum rental period: 180 days per year
• You cannot claim business expenses against this income
• Proper documentation of your residency is required

Important: If you exceed DKK 30,000 in annual rental income, all your earnings become taxable, not just the amount above the threshold.

Deductible Expenses

If your annual turnover from short-term rentals exceeds DKK 50,000, you may need to register for VAT (moms in Danish).

VAT Registration Requirements

• Threshold: DKK 50,000 annual turnover
• Rate: 25% VAT on rental income
• Input VAT: You can deduct VAT on business expenses
• Reporting: Quarterly VAT returns to SKAT

Exception: If you're only renting out your primary residence occasionally, you may be exempt from VAT registration. Consult with a tax professional to determine your specific situation.

Record Keeping Best Practices

Proper documentation is essential for tax compliance and can save you significant time and money during audits.

What to Track

• All rental income: Including platform payouts and direct bookings
• Guest information: Names, dates, number of nights
• Expenses: Every business-related cost with receipts
• Cleaning schedules: Dates and costs of professional cleaning
• Maintenance records: Repairs, upgrades, and routine maintenance
• Communication: Guest correspondence regarding issues or damages
• Calendar: Rental days vs. personal use days

Recommended tools: Use accounting software like Dinero, Billy, or Economic to track income and expenses automatically. Many integrate directly with Airbnb.

Penalties for Non-Compliance

The Danish Tax Agency takes short-term rental compliance seriously. Penalties for violations can be severe:

Common Violations and Penalties

• Unreported income: Back taxes plus 25% penalty
• Operating without registration: DKK 10,000-50,000 fine
• Failure to collect tourist tax: DKK 5,000-25,000 fine
• Exceeding rental limits: Loss of tax-free status plus penalties
• False documentation: Criminal charges possible

Recent enforcement: SKAT has increased audits of short-term rental hosts by 300% since 2023. Automatic reporting from platforms makes it nearly impossible to hide rental income.

Year-End Tax Planning

Strategic planning can help you minimize your tax burden while staying fully compliant:

Tax Optimization Strategies

• Time your expenses: Make necessary purchases before year-end
• Maximize deductions: Ensure all legitimate expenses are documented
• Consider incorporation: May be beneficial for high-earning hosts
• Plan rental days: Stay under 180 days if using primary residence exception
• Invest in improvements: Depreciate major upgrades over time
• Hire professionals: Management fees are fully deductible

Working with Tax Professionals

Given the complexity of Danish tax law, working with a qualified accountant or tax advisor is highly recommended, especially if:

• Your annual rental income exceeds DKK 100,000
• You manage multiple properties
• You're considering VAT registration
• You have international guests or properties
• You're unsure about your tax obligations

Cost vs. benefit: A good tax advisor typically costs DKK 3,000-8,000 annually but can save you much more through proper deductions and compliance.

Conclusion

Denmark's 2025 tax rules for Airbnb hosts are more stringent than ever, but with proper planning and compliance, you can successfully navigate the requirements while maximizing your rental income. The key is staying informed, keeping detailed records, and seeking professional advice when needed.