The Challenges of the Regulation Concerning Individual's Full Liability to Pay Tax

Patricia Woiremose Ibæk

Student thesis: Master thesis


This thesis addresses the challenges of the rules governing tax liability for individuals, which is a very topical issue within tax law. The thesis will investigate when an individual is taxable in Denmark via the existing legislation as well as analyze the development of the rules and case law regarding tax liability for individuals in order to assess the challenges posed by the tax liability area for individuals. The thesis will discuss the many rulings that exist, some of which relate to public persons, and try to come up with a solution to how the rules of law should look like to eliminate the related issues. The thesis addresses the applicable rules in § 1 and § 7 in the Act on Taxation at the Source, as well as the issues that the applicable rules give rise to. These issues include the uncertainty of when a residence is covered by the Withholding Tax Act, which is essential for Danes living abroad who want to keep a home in Denmark in order to maintain their connection to the country and their family. Additionally, the issues also include confusion regarding when a stay in Denmark is characterized as a holiday or similar, which is decisive for when a taxpayer becomes taxable to Denmark. One reason for this is that many people are working during their holidays and do not know that they can become taxable here in Denmark, even though their work does not concern the country and they are just here on holiday. These issues have been attempted solved by amending the current Act on Taxation at the Source, but the bill has subsequently been withdrawn because of massive criticism. The bill sought to tighten the rules for when a home is covered by the concept of residence in the Act on Taxation at the Source. The bill also tried to do away with the issue that a Danish expatriate cannot work during his or her vacation without being taxable in Denmark. Had the bill been adopted, it would mean that Danish expatriates could not maintain their residence in Denmark if they work and live in a country with no tax liability without being taxable to Denmark already from the first day they stayed here. This was one of the decisive reasons why the bill was withdrawn. Since no solution has yet been found to these issues, no new bill has been put forward that addresses the many rulings within this area.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2019
Number of pages62