Sponsorship agreement: a guide to sponsorship contracts in Denmark 2026

Sponsorship is an important source of funding for sport, culture and events in Denmark, and for businesses it is a marketing tool that combines visibility with engagement. But a sponsorship agreement is not just a token of goodwill. It is a legally binding contract that sets out the services, payment, rights and tax consequences.

This guide explains what you need to know about sponsorship agreements in Denmark.

What is a sponsorship agreement?

A sponsorship agreement is an agreement where a sponsor (typically a business) provides a contribution, usually money, goods or services, to a recipient (a sports club, a cultural event, a person or an organisation) in return for agreed counter-services in the form of exposure, rights or other market value.

Sponsorship is therefore a mutually binding agreement and not a gift. The sponsor expects a commercial counter-service, for example a logo on the shirt, mention on the website or tickets to the matches.

The distinction from a gift is decisive for the tax treatment.

Sponsorship agreement vs. donation

Aspect	Sponsorship agreement	Donation
Counter-service	Yes, marketing and exposure	No, an unconditional gift
Deduction (sponsor or giver)	Yes, as an advertising expense	Limited (only approved recipients under section 8 A of the Assessment Act)
VAT	Yes, the sponsor has a VAT deduction	No, no VAT
Legal nature	A mutually binding contract	A unilateral promise

A clear categorisation as sponsorship rather than a donation can give a significant tax advantage for the business.

What should a sponsorship agreement contain?

A good sponsorship agreement should cover all the key aspects:

1. The parties

Full identification: name, CVR number and address of the sponsor and the recipient.

2. The sponsorship amount or service

Describe precisely what the sponsor provides:

• An amount of money (and a payment plan: a one-off payment or ongoing contributions)
• Goods in kind (products or services, with the market value stated)
• A combination of money and goods in kind

3. Counter-services from the recipient

Describe precisely the agreed counter-services:

• Logo placement (position, size and number of exposures)
• Mention in press material and on social media
• Tickets or hospitality at events
• Access to the recipient's network or events
• Naming rights (for example "XX Arena" or "XX Cup")
• Digital exposure: website, newsletters and videos

The more specific the description, the easier it is to assess whether the counter-services have been delivered.

4. Period and extension option

• The agreement's start and end date
• Any right to extend, and on what terms
• The notice period before the agreement expires

5. Exclusivity

Many sponsors require exclusivity within their industry, for example:

• "The sponsor is the club's only banking partner"
• "The sponsor is the exclusive car partner"

Exclusivity is an important negotiation point and typically increases the sponsorship amount significantly.

6. Rights to content and images

Who owns the rights to images and videos showing the sponsor's logo, and who may use whom in marketing?

• The sponsor's right to use the recipient's logo and images in its own marketing materials
• The recipient's duty to obtain consent for particular uses

7. Breach and compensation

What happens if the recipient does not deliver the agreed counter-services?

• The right to full or partial repayment
• Compensation for a documented marketing loss
• The right to cancel the agreement on material breach

What happens on the sponsor's bankruptcy or non-payment?

• The recipient's right to demand payment and withhold services

8. Morality clause

A morality clause gives the sponsor the right to exit the agreement if the recipient acts in a way that harms the sponsor's reputation, for example:

• A doping conviction
• Scandals
• Politically controversial statements

The clause is intrusive, so weigh carefully what should be able to trigger it.

9. Confidentiality

Sponsors typically want the terms of the agreement (the amount and the exclusivity conditions) kept confidential. Insert a confidentiality clause.

10. Choice of law and dispute resolution

State that Danish law applies and how disputes are resolved (at the courts or by arbitration).

Tax and VAT on sponsorship

Sponsor: a deduction for advertising expenses

Sponsorship payments are deductible as advertising expenses, provided:

1. There is a genuine commercial counter-service
2. The expense is in reasonable proportion to the business benefit

The Tax Agency typically accepts sponsorship of sports clubs, cultural institutions and events as an advertising expense but requires documentation that it is a business disposition, that is that it aims at visibility in a relevant target group.

Sponsor: a VAT deduction

Sponsorship services are as a rule subject to VAT, and the sponsor can deduct the VAT as input VAT, provided the sponsor is VAT-registered and the service is for business purposes.

Recipient: VAT on sponsorship income

If the recipient is a VAT-registered entity (for example a professional sports club), VAT must be charged on the sponsorship income. Non-profit associations may, depending on the circumstances, be exempt from VAT liability, but this should be clarified specifically.

Recipient: income tax

Sponsorship income is as a rule taxable income for the recipient. For sports associations and cultural organisations, special rules on tax exemption may apply, so contact an accountant.

Sponsorship of private individuals (athletes, influencers)

Businesses can also sponsor individual athletes, influencers or artists. The rules are the same: the agreement should document the counter-services, and the sponsorship payment is deductible as an advertising expense.

Important: sponsorship to a private individual is taxable income for the recipient. Agree whether the sponsorship payment is inclusive or exclusive of tax, and be aware of the rules on withholding and reporting.

Naming rights

Large sponsorship agreements can include naming rights:

• Naming of an arena or stadium
• Naming of a tournament (for example "Sponsor A Cup")

Naming rights are legally complex, among other things because rights to names and marks can require registration as a trademark. Always seek legal advice on naming-rights agreements.

Frequent mistakes in sponsorship agreements

Vague counter-services: "Visibility at events" is not enough. Be specific about the number of logo displays, the position and the duration.

A missing morality clause: The risk of being the sponsor of an organisation in crisis can be large and difficult to handle without a clear clause.

No exclusivity: The sponsor pays for exposure that is shared with a number of competitors. Agree exclusivity, or address it expressly in the contract.

Unclear ownership of content: Who owns the images from the match where the sponsor's logo is visible?

Missing documentation: Keep the agreement and document the counter-services, because the Tax Agency can require proof that the sponsorship payment is an advertising expense.

Frequently asked questions about sponsorship agreements

Can I sponsor my local sports club and deduct it for tax?

Yes, provided there is a genuine commercial counter-service (logo placement, mention etc.) and the amount is reasonable in proportion to the commercial exposure. A pure donation can be given, but the deduction is limited.

Is there a maximum for what I can pay in sponsorship?

No, but large payments without a corresponding commercial counter-service can be set aside by the Tax Agency, for example as a disguised dividend or a gift.

What happens if the sports club is relegated to a lower division?

The agreement remains binding, unless it contains a clause that governs this, for example a right to renegotiate the price on relegation.

Can I terminate the sponsorship agreement if my business is in crisis?

Only if the agreement has a termination clause, or if you can invoke a breach. A binding contract cannot be terminated unilaterally, and an attempt to do so can lead to a claim for damages.

Should the sponsorship agreement be signed digitally or physically?

Both are legally valid in Denmark. A digital signature (for example with MitID) is quick and easy to document.

Conclusion

A sponsorship agreement is a commercial contract and not a token of goodwill. It protects both parties, documents the counter-services and supports a correct tax treatment. The more precise the agreement, the easier it is to evaluate and enforce.

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The content of this article is for guidance only and does not constitute legal advice. Consult a commercial lawyer or accountant for advice on your specific situation.