Konsekvenserne ved indførsel af underskudsbegrænsning og solidarisk hæftelse i lovforslag L 173

Pernille Bratved

Student thesis: Master thesis


The objective of this thesis is to analyze the motives and consequences regarding Bill L 173. The Bill consist a limitation in the use of deferrable tax losses and reintroduction of joint and several liabilities in jointly taxed companies. As a result of the limitation, tax losses can only be deducted by 60% of the profit in the year apart from a lower limit of DKK 7.5m. The remaining profit is to be taxed. The thesis describes the former and new rules regarding deferred tax losses and jointly and several liabilities. Furthermore the motives and consequences the Bill will have for Danish companies are analyzed in relation to cash flow, investments, administrations and specific industries and assets. The thesis will describe different possibilities to optimize the tax statements. Finally, the thesis consists a reflection on the motives and the content in the Bill, as if to assess whether the parts of the Bill will achieve the primary goal. Taxes in multinational companies has been discussed in the government and medias for years, and in 2010 the former government published an action plan, which presented the actual payments of taxes from Danish and foreign companies in Denmark. The initiatives in the action plan were never implemented, due to the conclusion, that incomes of corporate taxed from multinational enterprises were as expected. The present government implemented parts of the action plan, as part of financing the Danish and Appropriation Finance Act 2012. The Bill was submitted to different enterprises and organizations in consultation. The majority of the consultation partners pointed out several inefficient features in the Bill. This, however, did not resulted in any amendments to the Bill. The loss limitation will affect the liquidity of companies, as it will take longer before the loss can be used. The limitation especially affects enterprises working with research and development, often characterized by losses in the first years of operations, and then results in a single, large profit. In most cases, the enterprise is dissolved after successful sale of the developed product. This applies especially to the pharmaceutical industry, but also contractors. The issue has been presented to the Minister of Taxation, but the Bill does not oblige the industries. Finally, the limitation in use of deferrable tax losses could have significant effect on enterprises, which holds stock taxed assets. Worst case, they will not be able to pay taxes related to unrealized profit, and therefore have to sell assets in order to fulfill the new rules. Joint and several limitations in jointly taxed companies was removed in 2005 due to uncertain conditions regarding the new rules of mandatory jointly taxation. In the meantime, a few companies have been able to evade taxation, because of the possibility to transfer subsidies between jointly taxed companies. Jointly and several liabilities will be a protective rule to ensure that all companies pay their taxes, as they must. However, minority shareholders can be adversely affected by this, since they hold a subsidiary liability. The ownership of a minor proportion of shares could lead to taxation of income related to other companies.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2013
Number of pages83