Skattemæssig regulering af hybridt mismatch: Med specielt fokus på analysering af forbindelseskravet

Abstract

The Anti-Tax Avoidance Directive II, ATAD II [the ‘Directive’], was implemented in the Danish Corporate Tax Law and entered into force on 1 January 2020. The implementation of the Directive provides a new antiavoidance regime that seeks to counteract hybrid mismatches in the Danish tax treatment of instruments and structures across jurisdictions in EU and third countries. Apart from a few welcome adaptations, the Danish legislator has generally made a verbatim transposition of the Directive. However, the Danish implementation of the Directive wording is far from being clear and precise. Where no guidance is provided either from the Danish legislator or from the Danish tax authorities,
the taxpayer is therefore prompted to rely on the best practice recommendations included in the two OECD reports regarding Action 2 published back in 2015 and 2017, to fill in the gaps and to deal with any incompatibilities that may arise between the recommendations and the existing Danish rules, at least in
terms of objectives and context. The concepts in the Danish tax rules against hybrid mismatches that specifically require the taxpayer to actively interpret it for himself, are the concept of related persons, control group, acting together and the concept of structured arrangements. These concepts are of significance, as they are an important gateway to the application of the hybrid mismatch rules. In effect, any remedies to a hybrid mismatch in tax outcomes under the Danish hybrid mismatch rules are triggered only if there is a degree of relatedness between the parties or if the relevant dealing occurs under a structured arrangement. This master thesis analyses and demonstrates how the concepts should be interpreted. The overall conclusion is that even if the implementation of the Directive is a verbatim transposition, the Danish rules
have some minor pitfalls, particularly regarding reverse hybrid mismatches, which raise challenges in relation to increased risk of tax leakage for the investors and from an investment structuring perspective.