Tax — the principles, with Denmark as the example

What is mark-to-market taxation?

Mark-to-market taxation means you pay tax on the year's gain every year, whether or not you have sold. The value is measured at the start and the end of the year, and the difference is taxed. The opposite is realisation taxation, where the tax only comes on sale. In Denmark (lagerbeskatning) it is used for the aktiesparekonto and for most ETFs; Germany's Vorabpauschale on funds and Sweden's schablonskatt on an ISK are related ideas.

Tax is national. This page describes the rules in Denmark. The principle is the same in many countries, but the rates, caps and account types are not — check your own tax authority. If you use Kiggo in Sweden or Norway, the app shows your country's own tax terms (ISK and schablonskatt; aksjesparekonto and skjermingsfradrag).

Each red dot is a year end where tax is paid on that year's gain.

How it works

Example: You buy an ETF for DKK 50,000 on 1 March. On 31 December it is worth 55,000. You have not sold — but you are taxed on 5,000 in gains that year. The following year it falls to 52,000. Then you have a loss of 3,000, which is offset against other gains (or carried forward).

So you pay as you go, while you own — instead of one large bill on the day you sell.

Pros and cons

Con: You need money for the tax every year, even when you have not sold. And you lose the compounding on the tax you pay early.
Pro: Losses are offset immediately. And there is no giant tax bill the day you sell after 20 years — it has been paid along the way.

What is taxed mark-to-market in Denmark

Everything in an aktiesparekonto (17%).
Most ETFs and foreign funds. If the fund is on the tax authority's list of equity-based investment companies, the gain is taxed as share income (27/42%); if not, as capital income — often higher.
Ordinary stocks in a regular account are not taxed mark-to-market — they are taxed on realisation.

The rates and the list change. Always check skat.dk or your provider for the specific fund.

Kiggo says: Mark-to-market taxation is like settling the accounts every New Year. Not fun — but there are no surprises.

The typical beginner's mistake

Buying an ETF with all your money and only discovering in January that tax is due on the gain — with no cash to pay it. Keep a small buffer, or be ready to sell a little.

How you see it in Kiggo

Kiggo explains on every ETF whether it is accumulating or distributing, and in the app's dictionary, mark-to-market taxation comes with a small drawing showing the difference from realisation taxation. Kiggo does not calculate your tax — your provider and skat.dk do — but makes sure you know what the words mean before you buy.

Frequently asked questions

Why are ETFs taxed mark-to-market in Denmark?

Because most ETFs are foreign funds, which Danish tax law treats as "investment companies". The rules are set politically and have changed several times — it is not something the fund itself chooses.

Can I choose realisation taxation instead?

Not for funds that are taxed mark-to-market — it follows the fund's type, not your wish. If you want realisation taxation, you need individual stocks or Danish distributing funds approved for it.

Kiggo explains — Kiggo does not advise. We never tell you what to buy or sell, and key figures can only be compared between companies in the same industry. The decision is yours. Last updated 2026-09-07.

Written by Claus Frisch, founder of Kiggo. Not an adviser, not a bank — Kiggo explains, you decide.