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Denmark To Shut Equity Holdings Tax Avoidance Opportunities



On October 1, 2019, the Danish Tax Ministry announced the submission to parliament of proposed measures aimed at preventing tax avoidance schemes connected to share dealings.

According to the ministry, the proposals include new rules for the determination of shareholdings by major shareholders in companies with multiple share classes. These are designed to ensure that tax is calculated more accurately and to prevent tax planning schemes which generate artificial reductions in equity gains, deductions for artificial losses, and which avoid dividend tax.

The Government is also proposing new rules to ensure that capital fund partners’ remuneration is taxed on the same basis as that of employees.

The proposals amend the Equity Taxation Act, the Capital Gains Act, and the Equalization Act, among other laws.

The proposed legislation is set to enter into force on January 1, 2020, although certain aspects of the proposals will have effect from October 1, 2019, when the bill was submitted to parliament. This article was correct at the date of publication. It is intended as an aid and cannot be expected to replace specific professional advice and judgment. No liability for errors or omissions will be accepted. It is the responsibility of those using the information to ensure it complies with the law at the time of use and that it is used in line with relevant rules and regulations governing the subject matter in question.

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