Tag Archives: tax

Denmark proposes number of tax changes through new labour market plan

On 7 September the Danish government has presented a plan to increase the number of people that are active on the labour market. This plan also has a number of tax proposals in order to finance the plan, as well as position Denmark to become more prosperous, greener and more skilled.

The tax proposals include:

  1. To support innovation the temporary superdeduction of 130% for R&D expenses by business will be made permanent. The superdeduction will be capped at a tax value of the deduction of DKK 50 million.
  2. To support the energy transition, the government proposes to reduce the general electricity tax gradually by 23 øre/kWh by 2030. This reduces the tax from 90 øre/kWh in 2021 to about 57 øre/kWh by 2030. The new reduction will be phased in from 2022.
  3. The so-called green cheque will be abolished. The green cheque was introduced in 2010 as a blanket compensation for raising environmental taxes. The proposal will leave the green cheque for pensioners and the supplemental green cheque for children of 240 DKK in place.
  4. the government proposed that the highest tax rate for share income should be raised from 42 to 45 percent. In addition, the ceiling that ensures that the tax on positive net capital income cannot exceed 42 percent will also be raised to 45 percent.

It is expected that these proposals will be sent to parliament soon. The government’s plan can be found here. https://fm.dk/media/25134/danmark-kan-mere-1_web.pdf

 

Public consultation on simplifications of transfer pricing documentation

On 23 June the Danish ministry of Taxation opened a public consultation to simplify transfer pricing documentation. The current rules require transfer documentation for all intra-group transactions, also between purely domestic situations.

The government proposes that the obligation to document applies only in situations where there is an actual risk that tax avoidance and tax arbitration may occur. This means that the requirement will be relaxed for transaction between Danish companies in the same group that are both subject to Danish corporate income tax.

The details of the consultation can be found here https://hoeringsportalen.dk/Hearing/Details/65287 . The proposal is expected to enter into force on 1 January 2022.