UK and International Tax news

Danish WHT And Overseas Investment Funds

Friday 26th April 2013

Further to our International Tax News item of 8 April 2013 in respect of the CJEU case [Commission v Belgium C-387/11], the EC has formally requested Denmark to change its taxation of dividends distributed to foreign investment funds.

In Denmark, dividends distributed to funds registered as “investment institutes with minimum taxation” are exempted from tax, but only if the institute is Danish.

The EC considers that the Danish tax rules discriminate against “investment institutes with minimum taxation” from other Member States and breaches the freedom to provide services and the free movement of capital as set out in the EU Treaties.

Following a letter of formal notice sent by the Commission on 30 April 2012 (first stage of the infringement), the EC is now requesting Denmark to change its legislation within two months to bring it in line with EU law (second stage of the infringement). If Denmark does not comply, the EC may decide to refer the case to the EU’s Court of Justice.

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