The purpose of this thesis is to conduct a sanity check of the taxation of foundations anno 2013. This sanity check is conducted by clarifying whether that the Danish Taxation on foundations Act (Fondsbeskatningsloven) is functioning according to its original purpose, and through identifying which practical challenges the foundations face when calculating their taxable income. The challenges focused on in this thesis are the taxation of their profit making on stocks, the consequences of the repealing of the law on entrepreneur taxation (Iværksætterskatten) on foundations, the taxation of a reduction of the foundation’s net capital, the tax related consequences from the distribution of restricted capital and the tax related effects of the prioritization rule (Prioriteringsreglen) compared to previous years reserves. The thesis is based on the argument that while other laws and rulings which exert influence on the taxation of foundations have been updated, these have not been implemented into the law on taxation of foundations and that these changes do not satisfy the original purpose of the law on taxation of foundations. Through an inductive approach first the general issues of the law on foundations are presented followed by a description of the taxation issues in general that the foundations face, which leads to an analysis of the consequences thereof. In order to illustrate and analyze the different tax related consequences of the laws on foundations, three foundations of which two are non-commercial and one is a commercial foundation, are presented. The two non-commercials are respectively charitable and non-charitable. Based on the sanity check of the taxation of foundations anno 2013 in this thesis it is concluded that there are parts of the law on taxation of foundations which do meet the original purpose. However, some issues, such as for example the tax exemption on the taxation of their profit making on stocks, are not up to par with the intention of the law on taxation of foundations. It is further concluded that the repealing of the law on entrepreneur tax only affects commercial foundations and that if their distributions are reduced and/or their tax exempted income increases, it will have a negative impact on the taxation of listed stocks when applying the principle of realization (Realisationsprincipet). Furthermore, it is found that according to SKM2013.78SR, foundations are now taxed on the same grounds as corporations when reducing the foundations restricted capital, however with some exceptions. The tax effect of the prioritization rule on previous year’s reserves is that previous year’s reserves must be used for distribution before a tax credit can be received on new distributions.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||84|