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Tax treaties between Denmark & France and Denmark & Spain are to be terminated

Yesterday, the Danish Ministry of Taxation issued a press release announcing that Denmark has terminated the tax treaty between Denmark and France as well as the tax treaty between Denmark and Spain. The termination of both tax treaties will take effect as of 1 January 2009.

Bech-Bruun, your Taxand member firm in Denmark, has been in frequent contact with the Danish tax authorities and it is our understanding that, specifically in relation to the tax treaty between Denmark and France, negotiations are ongoing between the tax authorities. There are still issues on which the parties have not reached agreement particularly in the area of the taxation of pensioners formerly tax resident in Denmark and now tax resident in France. We understand that negotiations between the Danish and Spanish tax authorities have been less intensive.

It is our impression that the Danish tax authorities aim to have a new treaty in place with both France and Spain as of 1 January 2009, but we do not have specific information regarding the position of the French and the Spanish tax authorities on this matter.

We will continue to monitor developments closely and keep you updated of any developments. In the meantime you are of course welcome to contact us on any the Danish aspects of the termination as well as any precautions or unwinding measures which may be taken prior to the termination taking effect as of 1 January 2009.

Your Taxand contact for further queries is:

Anders Oreby Hansen T. +45 72 27 3602 E. aoh@bechbruun.com

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