Virksomhedsskatteloven: Om formålet med lov nr. 992 af 16. september er blevet opfyldt

Mickey Kræmmer Olsen

Student thesis: Master thesis


The main topic of this assignment is to describe and analyze the main changes in the Danish Business Taxation Act (virksomhedsskatteloven) from 2014 and 2016. The Act was first introduced as a part of a larger comprehensive taxation reform back in 1987. Certain key elements to the Danish taxation system was changed, which resulted in a split of personal income into two categories: Personal income and capital income. To give self-employed business owners the opportunity to be taxed in a similar way to companies, the Danish Business Act was introduced.
In the winter between 2013 and 2014 it came to the Danish Ministry of Taxation’s knowledge that self-employed business owners had found loopholes to minimize their taxpayment by using the Business Taxation scheme in ways unintended by the legislature. This led to the Danish parliament in September 2014 passing the Law no. 992 of 16th of September 2014, in which the purpose was to close the loopholes found in the Danish Business Taxation Act.
This introduced several sanctions to the Business Taxation Scheme to punish the unintended use and neutralize the benefits from using the scheme in unintended ways. If business owners made collaterals in assets of the business for private debt it would now be granted a heavy taxation in the business owners’ personal income. Some business owners saw an advantage of injecting private debt into the business to get a larger deduction. The change of the law strived to neutralize that advantage by increasing the interest correction and remove the opportunity for the business owners to save up profit in the business if the business deposit account turned to a negative amount.
The changes left several elements unclear to the business owners. It was hard for business owners to figure out what kinds of collateral would trigger the taxation, and many questions were sent to the Danish Tax authority that would give binding replies. In 2015 the Danish Tax authority gave a binding reply to a question that would shift the way collaterals would be treated in the Danish Business Taxation Act. Their reply ruled against the way legislature originally intended the taxation to be handled in the Danish Business Taxation Act. This was later written into the law in 2016.
Several bigger organizations standing behind groups of self-employed business owners criticized parts of the major changes, stating that the sanction taxation was way too heavy, and basically acted as a double taxation. Despite the criticism the legislature did not end up changing the heavy taxation, and only a few of the suggestions from the organizations made it into the final law. This thesis’ objective is to analyze if the changes to the Danish Business Taxation Act has reach its originally purpose.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2020
Number of pages87