Exit-beskatning af selskaber: De danske reglers forenelighed med EU-retten

Christina Nilsson

Student thesis: Master thesis


This following master thesis concerns exit taxations of companies within the EU. The main objective of the thesis is to analyse and determine whether the Danish legislation on exit taxation adopted in Danish law by February 6th 2014 is compatible with the case law of The European Court of Justice (ECJ) To accomplish this objective the main part of the thesis is spent analysing cases on exit taxation from European countries. Among these the Commission v. Denmark (C-261/11), in which the Danish former legislation on exit taxation was found incompatible with the EU law comprising the freedom of establishment. This due to the fact, that the legislation triggered immediate taxation of unrealised capital gains on assets when those were transferred from a company established in Denmark to another EU Member State. The existing case law does however show that exit taxation under certain conditions can be justified. The exit taxation must pursue a legitimate objective – among others, the ECJ has accepted the objective of ensuring the balanced allocation of taxation powers between member states. Furthermore, the exit taxation must be appropriate to the preservation of the given objective. Finally yet importantly, the exit taxation must not go beyond what is necessary to attain the pursued objective i.e. it must be proportionate. Regarding the last condition, several judgements from the ECJ have shown that it by default is inappropriate to immediately recover the exit tax at the time of transfer. The exit tax may be recognized immediately but there must be an option to gain deferral with the payment until the time of disposal. For those assets that are not intended to be disposed, an alternative criterion can be set, which should be less restrictive than taxation at the time of transfer. The deferred tax may be charged interest and guaranteed provisions may be required if the risk of non-recovery of the tax is substantial. In continuation of this interpretation of the case law of ECJ the main features of the new Danish legislation are described. A comparison of these and the obtained understanding of the EU law obtained leads to the conclusion that the new Danish legislation, even though it gives freedom of choice between immediate payment and deferral, is still disproportionate. The main issues are that an alternative criterion for the recovery is extended to all types of assets, and the choice of deferral involves significant administrative burdens. It is also found questionable if the interest rate at 3% goes beyond what is necessary. It is therefore expected that ECJ will find the new Danish legislation disproportionate.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages85