In June 2012, the Danish Parliament passed the amending law entitled "strengthening actions against zero tax companies". Purpose of the Act as a whole is to increase tax revenues, particularly from multinational corporations that do not pay company tax in Denmark. The four main parts of the law are: · Liability for company taxes and withholding taxes in joint taxation · Reduction in offsetting of losses · Transfer pricing documentation – Auditor’s report and fines · Transparency of companies tax payments The rules generally apply to income years beginning on 1 July 2012. Due to the reduction rules, it is initially assumed, that the rules will have a significant impact on large Danish contracting groups. Such a group is designed for the purpose of analysis and conclusions of the effect of the law. In the thesis, the new legislation is analyzed and problematized, after which the consequences for the case group are determined. Finally, concrete examples for the case group is given on how to adapt to the new legislation The new regulations regarding liability for company taxes and withholding taxes in joint taxation, leads to joint and several liability for these taxes, depending on shares. This also applies to case group, even after possible transfer of one company to the owners' father. Reduction in offsetting of losses involves unlimited offsetting of losses from prior years up to 7,5 mio. kr., after which offset only can be done with up to 60% of the remaining taxable income. These rules will have negative effect on liquidity of certain companies, including companies and groups with work in progress, recognized for tax purposes upon completion. The case consolidated loss offsetting is reduced with a tax value of DKK 6.386, giving an expected minimum interest expense of t.kr. 319. The case group is recommended to consider the possibility of switching to production principle, whereby income is equalized and limitation minimized. There are introduced increased fines and in some cases the imposition of audit reports, regarding transfer pricing documentation. By handing in deficient documentation, the case group risks a fine of minimum t.kr. 125. By giving outright false or misleading information, the case group risk a fine of 2,5 mio. kr. Finally the new regulations involve transparency of companies tax payments and taxable income. Consequences are expected to be limited.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||95|