The Danish Taxation Scheme: Consequences due to Amendment no. 992 of September 16 2014 and Amendment no. 652 of June 8 2016

Tina Jeppesen & Heidi Jeppesen

Student thesis: Master thesis


The Danish Business Taxation Scheme was adopted in 1987 in order to negate the distortion between limited companies and privately owned companies.
In 2014 and 2016, the Danish Parliament adopted Act No 992 of 16 September 2014 and Act No 652 of 8 June 2016. The purpose of these acts was mainly to prevent the taxpayer from reducing or deferring tax payment in a way that was not consistent with the original intentions of the Danish Business Taxation Scheme. The tax advantages was mainly achieved by including private debt in the company’s tax calculations or by using the company ‘s assets as collateral for private debt.
In order to eliminate these advantages, the main items of the amendments was:
• Temporary taxation of company profits can no longer be applied if there is a negative deposit account
• The interest correction rate has been increased by 3% in order to reduce the advantages of a deduction
in company profits
• Taxation of collaterals, if the company’s assets are pledged as security for private debt
The purpose of this thesis is to analyze the consequences of the amendments of Act No 992 of 16 September 2014 and Act No 652 of 8 June 2016.
Although the amendments has definitely made it significantly more unfavourable to use The Danish Business Taxation Scheme to reduce or defer tax payments, the scope of the amendments is not limited to these specific areas of abuse. The amendments also affect people who have made one of the following dispositions:
• Tax free partial restructuring of the company
• Rental of property, which has been occupied by the owner
• Collaterals with floating charge
Despite these problems with the rules in the new amendments, The Danish Business Taxation Scheme still seems to be an attractive way to run a personally owned business.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2017
Number of pages161