Udvidelse af udbyttebeskatningen: En konsekvensanalyse af selskabsskattelovens § 2 D

Julie Joy Gram Olsen & Mads Eriksen

Studenteropgave: Kandidatafhandlinger


The primary objective of this thesis is to provide an overview of the legal consequences of the new anti-avoidance rule on dividend taxation in group reorganizations, which is contained in section 2 D of the Danish Corporation Tax Act. Moreover, the thesis will include a consideration on what elements to include in an analysis of the economic consequences of such a regulation. Due to section 2 D, a group internal sale of shares is treated as a dividend payment for tax purposes pro-vided the seller is a “legal person” transferring shares in an affiliated company to another affiliated com-pany and that the remuneration is not shares issued by the buyer. The provision primarily comprises mi-nority shareholders with less than 10% of the share capital. A transfer of shares between affiliated Danish companies is subject to Danish dividend taxation and a duty to withhold tax. However, foreign companies are not obligated to withhold a tax on dividends due to the lack of legal basis in the Danish Withholding Tax Act. In general it is uncertain whether foreign entities can be tax liable after section 2 D since the provision that prescribes limited tax liability to Denmark does not include a reference to the new anti-avoidance rule. In the case of group transfers of Danish shares be-tween foreign companies, section 2 D is inefficient. In legal terms the shareholders are obligated to pay the dividend tax, but due to the supply elasticity and the free movement of capital in an open economy, the economic tax incidence shows that the Danish workforce bears the actual burden of the taxation of dividends. In economic terms it is not optimal to levy a tax on dividends as it distorts the allocation of capital. Regardless of this, dividends are subject to taxa-tion under Danish law. Yet, prior to the introduction of section 2 D, it was possible to avoid this tax by conducting group internal reorganizations. To determine the economic consequences of the provision, one must compare the social costs incurred to circumvent the tax to the economic distortions inflicted by the tax. On the one hand the economic impact on companies of section 2 D is smaller than the tax revenue of the government. Yet, on the other hand the cost of capital increases due to the shareholders’ demanded increase in gross return. Consequently, less capital will be placed in Danish shares. If the positive effects of the tax exceed the negative consequences, it is efficient to expand the definition of dividends by section 2 D as it can reduce the distortions of the general Danish dividend tax. Section 2 D is probably introduced on non-fiscal grounds, as its scope goes beyond its objective. The eco-nomic distortions of the provision will presumably decrease if the scope is narrowed.

UddannelserCand.merc.jur Erhvervsøkonomi og Jura, (Kandidatuddannelse) Afsluttende afhandling
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