Fortolkningen og anvendelsen af det skatteretlige ”Beneficial owner”-begreb

Kenneth Østergaard & Jerrik Olsen

Student thesis: Master thesis

Abstract

In connection with the payment of income, in the form of dividends and interest, from Danish to foreign companies, tax of 27% and 22%, respectively, must be withheld at source according to Danish tax law as the foreign companies are subject to limited tax liability to Denmark. This tax liability ensures that profits from Danish companies are taxed in Denmark. The limited tax liability does not apply, however, if the company is resident in another EU country, or in a country with which Denmark has entered into a double taxation treaty. These exemptions may be abused by international groups by interposing an intermediate holding company in such country which also has more favourable tax agreements with the resident country of the company; the income may thus flow tax-free from Denmark, through the intermediate holding company, to the parent company. There are, however, no tax benefits to be reaped if the intermediate holding company cannot be regarded as the “beneficial owner” of the income; which has been introduced to prevent abuse. However, the concept of beneficial owner has not been defined in the wording of the Act, which leads to uncertainty as to the interpretation of the concept. The purpose of this Thesis is to examine how the concept should be interpreted, and which criteria should be weighted when assessing whether a company should be regarded as the beneficial owner, including an identification of the tax contexts in which the concept is relevant. The conclusion to our examinations is that the concept is to be interpreted autonomously, not according to domestic law. An intermediate holding company cannot be regarded as the beneficial owner when it is a conduit company with respect to the income and only has narrow powers over the income in question. The purpose of the group structure and the effect of the transaction must be to abuse tax benefits. Considerable uncertainty continues to exist as to the interpretation of “narrow powers”; however, criteria such as the owners’ control as well as a contractual or legal obligation to pass on the payment received seem to be crucial. Finally, an overall assessment of the specific case should be made, which means that the actual circumstances are also of great importance.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages115