Amongst many people, shareholder loan have been a very discussed subject. Throughout many years there has been a general company law prohibition against lending money to the auctioneers of a company. § 16 E of the Assessment Act was introduced on August 14 2014, which made taxing a shareholder loan possible whether they were legal or not following the Danish company. § 16 E of the Assessment Act is taxing individuals with a controlling influence whom directly or indirectly are having funds available by the same companies of their control-ling influence. The taxing of loans covered in § 16 E of the Assessment Act is done so by regular tax law on non-refundable withdrawals, which means that the loans are being taxed at the time of the pay-out. Besides actual loans, the § 16 E of the Assessment Act also covers the securities and funds available for the auctioneers. According to tax law the shareholder loan is not considered a loan, but as an withdrawal without a refund obligation which means the loan is either taxed as salary or as a profit. In order for a loan to categorize as salary, an em-ployment between the auctioneer and the company has to be available and if not the loan is taxed as a profit. In § 16 A of the Assessment Act, three exceptions appears; 1) A loan made as part of a regular business disposition. 2) An usual loan from banks. 3) Loans paid for self-financing. The exception of loans as part of a regular business disposition leaves a lot for interpretation. Ac-cording to the Danish tax authority a loan has to be provided by independent third parties under the same conditions in order to be a regular business disposition. Once the shareholder loan is made the auctioneer can seek to overturn the decision, correct the error or off the loan in either wages or dividends The purpose with § 16 E of the Assessment Act was to remove the incentive to make share-holder loan. The Danish tax authority general approach and interpretation of the provision has also meant that it has become less attractive to make shareholder loans instead of paying wages or dividends. The precise impact is difficult to conclude upon since the latest figures only include 2012. However, the development was that the number of shareholder loans is declining for many years of rising.
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