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Denmark: Tax Round-Up of 2010
Taxand Denmark's annual tax newsletter covers the most significant Danish tax news from September 2009 to June 2010 and is based on extracts from our tax newsletters and articles. The period covered corresponds with the Danish parliamentary year and includes legislative amendments applicable to foreign individuals and companies.
Generally, it has been a quiet year on the Danish tax scene after last year's extensive tax reform. The tax reform entailed significant changes to the Danish tax system, including a reduction of the high Danish marginal income tax rate on employment income and an improvement of the Danish participation exemption for dividends and capital gains realised on the transfer of shares. Taxand Denmark's annual newsletter follows up on those changes.
This year, the main legislative change is the adoption of new rules on taxation of capital income and investment funds. The amendments harmonise the taxation of capital gains on receivables and bonds issued in Danish kroner held by individuals with the taxation of receivables being in foreign currencies.
In April 2010, the Danish Tax Tribunal (Landsskatteretten) published the first Danish decision regarding beneficial ownership under Danish law. The Tribunal's decision in favour of the tax-payer provides insight into the tax authorities' approach to beneficial ownership requirements. The Danish tax authorities have appealed the decision.
The new Danish Companies Act has come into force, replacing the Danish Corporations Act and the Danish Limited Companies Act. The new Act liberalises, modernises and simplifies the Danish corporate rules.
Denmark has entered into double taxation treaties covering approximately 75 jurisdictions and recently also a number of exchange of information agreements. Taxand Denmark provides an update on recent changes to the status of Denmark's tax treaties, including a description of the status of renegotiation of the terminated tax treaties with France and Spain.
The Danish tax authorities has announced transfer pricing to be one of their target areas in 2010, specifically with respect to zero per cent taxpayers and transfers of intangibles, including the valuation of such. The Danish tax minister has released a statement according to which the Danish tax authorities will produce a new plan of action to increase compliance with the Danish transfer pricing rules. As of the date of printing this newsletter, the plan has yet to be published.
Finally, Taxand Denmark gives a short introduction to recent amendments to the Danish VAT rules concerning mandatory reverse charge on cross-border business-to-business sales, increased reporting to the EC sales list and abolishment of the VAT exemption on management and sale of real estate in certain situations.
Your Taxand contact for further queries is
Anders Oreby Hansen
T. +45 72 27 36 02