Fraflytningsbeskatning: Foreneligheden med EU-retten

Abstract

This thesis examines whether Denmark’s exit-tax regime for individuals, as laid down in articles 10, 73 B and 73 C, of the Withholding Tax Act, are in accordance with the EU principles of the freedom of movement, namely articles 21, 45 and 49 TFEU, using real estate to exemplify the tax implications of relocating within the EU. It combines legal-historical, legal-dogmatic and legal-policy methods to first establish the historical purpose of the Danish exit-tax regime and determine the relevant, and current, EU-regulation in order to then test specific Danish provisions in line with the Court of Justice of the European Union’s (CJEU) proportionality test. Lastly the thesis will propose amendments to the Danish exit-tax regime that aim to improve EU-conformity. Within the Danish exit-tax regime, the identified restrictions can be assorted into three general categories: administrative burdens, risk of harsher taxation and liquidity stress. The general purpose of restrictions in the form of administrative burdens and risk of harsher taxation is a balanced allocation between EU-Member States of the power to tax, which is accepted as an objective in the public interest by the CJEU. The purpose of the restrictions inducing liquidity stress is to secure Danish taxation through effective tax collection, which is also accepted by the CJEU. However, all the identified restrictions, with exception of the administrative burdens, fail the CJEU’s proportionality test, when it comes to their necessity, as it must be deduced from the case law of the CJEU that their aims can be achieved through less invasive provisions. Safeguarding the Danish power to tax and collection efficiency is a legitimate aim, yet proportionality demands milder tools. The legal-policy discussion shows that the EU-conformity of the Danish exit-tax regime can be improved by offering non-interest bearing, non-discriminatory payment deferral until disposal for relocations within the EU as well as symmetrical loss-relief and cancellation of the deferral balance with a modification to the acquisition cost for tax purposes upon once again taking residence in Denmark. The proposed amendments would mitigate the disproportionate impacts at limited fiscal costs while enhancing legal systemic coherence and certainty.