If you have equipment you'd like to sell to your own company — or the other way around, buy equipment from the company privately — that's generally legal. But because you're sitting on both sides of the table, a special rule applies that many overlook, until the Danish tax authorities point it out to them.

The arm's-length principle

Transactions between you personally and your own company — or between two companies you both control — must happen on arm's-length terms, per Section 2 of the Danish Tax Assessment Act. This means the price must correspond to what an independent third party would have paid for the same equipment under similar conditions. In other words: you can't use your dual role to set a price that's artificially high or artificially low, depending on what's tax-advantageous for you.

What happens if the price isn't at market level?

If the tax authorities assess that the price deviates from market value, they can correct the transaction for tax purposes — regardless of what you've agreed on paper. This can trigger unexpected tax consequences for you personally, for example if a too-high price is in reality treated as a disguised distribution, or a too-low price triggers taxation of a benefit you've effectively received. The consequences don't just hit the company — they hit you directly.

How to protect yourself

  • Get an independent valuation, or at least document how you arrived at the price — for example by comparing it to what similar used equipment actually sells for.
  • Keep the price consistent with what the market actually pays for similar equipment of the same age and condition.
  • Keep the documentation. If you can't show how the price was set when the tax authorities ask, you're in a weak position — regardless of whether the price was actually reasonable.

Be cautious with repeated transactions

A single sale of a piece of equipment is rarely a problem if the price is documented and reasonable. A pattern of repeated back-and-forth transactions between you and your company, on the other hand, typically attracts more attention, because it can look like an attempt to continuously shift value between you personally and the company, rather than genuine business transactions. If it's a one-off situation, the risk is far lower than if it becomes a recurring practice.

Frequently asked questions

Can I sell my private equipment to my own company?

Yes, but the price must match market value — the so-called arm's-length principle, per Section 2 of the Tax Assessment Act. If you sell at a price that deviates from that, the tax authorities can set the price aside.

How do I document that the price is correct?

By obtaining an independent valuation, or by being able to show what similar used equipment of the same age and condition actually sells for on the market. Keep the documentation so you can present it if the tax authorities ask.

What happens if the tax authorities assess that the price wasn't at market level?

They can correct the transaction for tax purposes, which can trigger unexpected consequences for you personally — for example taxation as a disguised distribution or a taxable benefit, depending on which way the deviation goes.

Read more about how to correctly withdraw money from a sole proprietorship, or about the importance of company structure for transactions like this.

153