A bill has been proposed to the parliament to revise the Danish list of protective measures. The bill may have tax consequences for companies with activities in Bahamas, Belize, Seychelles or Turks and Caicos Islands.
The blacklist
The EU list of non-cooperative jurisdictions for tax purposes is revised twice a year. On 20 February 2024, the EU Council revised the blacklist, removing Bahamas, Belize, Seychelles and Turks and Caicos Islands. However, the revisions are not directly enforceable under Danish law as the Danish provisions on special tax rules for blacklisted jurisdictions must first be expanded in scope by the Danish Parliament. Therefore, the Danish Minister for Taxation proposes that this revision is implemented in Danish law with effect from 1 July 2024.
The Danish list of non-cooperative jurisdictions for tax purposes is found in section 5H (2) of the Danish Tax Assessment Act.
Background
The EU is working on an ongoing basis to discourage the use of tax havens and to fight tax evasion and tax avoidance. One of the measures taken is to draw up a common EU list of non-cooperative jurisdictions for tax purposes (EU's blacklist).
Denmark has introduced special tax rules related to jurisdictions on the blacklist. The rules include (i) non-deductibility in Denmark for payments to related entities that are resident (or registered) for tax purposes in a blacklisted jurisdiction, and (ii) increased withholding tax rates on dividends distributed to recipients that are resident (or registered) for tax purposes in such jurisdictions.
The rules were implemented in Denmark with effect from 1 July 2021 and initially covered the countries listed on the EU blacklist at that time.
Read more: New defensive measures against EU blacklist countries | Kromann Reumert
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