Underskudsfremførsel ved ejerskifte

Peter Schwensen & Steffen Severinsen

Student thesis: Master thesis


Ever since Danish legislature in 1957 introduced the possibility to carry forward tax losses there has been a political debate about companies’ opportunities to exploit the wording of the law, which was not intended by the legislature. Consequently, new paragraphs were put in place, intended to stop the trading of deficit companies exploiting saved losses in the transferor company. The corporate tax law § 12 D deals with the prospect of exploitation of a company’s previously tax losses by a significant change in the company’s circle of owners. The political debate has changed over time but still today there is some doubt about how to interpret the concept of “financial risk by business activity” combined with a company’s significant change of owners. This is the case despite the significant financial consequences it has for the companies not being able to use previous years saved tax losses to carry down the taxable income. This thesis aims to define the concept of “financial risk by business activity” seen from a tax perspective when tax losses is carried forward, combined with a company’s significant change of owners. This will happen with an assessment of current legislation and a retrospective on the historic legislation and a compares of that time. The thesis will analyze how the rules on change of owners are to be understood using concrete examples and an analysis on how to interpret the concept in practice. The analysis will be based on binding answers from the Danish Tax Authority and verdicts from the Danish court of justice. Even though it will not succeed to define the concept of “financial risk by business activity” from an objective point of view, there will be set up a number of criteria which will be significant for the valuation of a company’s right to use previous years of tax losses by a significant change of owners. Subjective criteria will be set up based on a perception of, that it is not possible to set up objective metrics, which will be accurate in determining whether a company should be assessed empty due to lacking financial risk by business activity. One of the decisive criteria in the assessment of business activity is the company's profitability. If the company is not profitable at the time of the assessment, an overall assessment must evaluate whether the company is able to be profitable in the long term. This assessment is based on whether the company is run seriously and professionally by an owner with appropriate professional skills; in addition the company must be of a certain size and intensity. Executive summary In order to assess the company's financial risk it is crucial if the company definitely has ceased its activity. It will be assessed by an overall assessment based on the following four criteria:  Whether the company has dismissed all or most of the staff,  Whether the company's production of goods, services, etc. in fact ceased,  Whether the company has disposed of the physical assets such as production equipment and inventories  Whether the company has a turnover If the activity is not set based on the above criteria it must furthermore be assessed whether the activity are of a significant nature. In the thesis perspective there will be focus on the importance of reality principles in the Danish case law. The invasion of reality principles in the Danish tax system puts the rule of law in a hazard. It is no longer the conducted civil actions exclusively there apply but also the intent of actions. The civil dispositions are hereby override in the Danish tax system, because the purposes of these do not have the character of business but is only made to circumventing the tax legislations.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages105