Selskabsskattelovens § 2D: Og forholdet til udenlandske investeringer i Danmark

Morten Østerlin

Student thesis: Master thesis


The main object of this master’s thesis is to analyze the new Danish regulation , Corporate Tax Act §2 D from a legal and economical perspective. This act of legislation is caused by the difference in taxation of dividends and profit of shares when sold, which leads to speculations of tax evasion. Specifically shares were sold within a company through a conduit division, which fulfilled the debt by payoffs with dividends received from the overtaken company. Therefore SEL §2 D was constituted to prevent these actions. The regulation therefore imposes a duty on the on the conduit affiliate to within hold a tax on the payment of 27 %, equivalent to the rate of dividend payments. In reality the rule targets investors in tax heaven‐countries, but also affects minority shareholder with a share less than 10 %. The economic outlook of this assignment has its focus on the foreign direct investments and the consequences of the imposed rule. A general look at the trends of Danish investments seems to give the impression that the flow of capital out of the country compared to the inflow is disproportionate compared to countries similar our size and demographic qualities. Given the wish of funding taxes from foreign investments, one might argue that investors will invest in other markets and the revenue will not occur. Likewise, on the long run the cost of the taxation is overturned to the workers in Denmark presuming perfect mobility on capital, just like a deadweight loss will occur. Therefore the wish of overturning the taxation to tax evaders does not necessarily succeed. The thesis concludes that the scope of the rule seems to be exceed the suggested purpose from the legislator. SEL §2 D will effect companies in restructuring, since potentially being subject to an extra 27 % taxation when re‐organizing divisions within the concern internally. The consequence of a taxation will be a diminishment in the attractiveness of foreign investments within Denmark. However, some theoretical framework suggest that if the tax is performed at a proper rate, the strength of the marked will cause investors to keep a steady level of invested capital.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2014
Number of pages86