Reclassification of Tax Transparent Entities

On 19 and 20 April 2021, the Danish tax authorities published two rulings from the Tax Assessment Council (in Danish: Skatterådet) regarding reclassification of tax transparent entities according to the rules on hybrid mismatch arrangements in section 2 C of the Danish Corporation Tax Act. Entities are related within the meaning of the rules if they are “acting together”, and a key take away is that investors participating in entities with the same management may be considered as acting together through the joint management in relation to underlying investments. The fact that several investors invest in the same entity cannot in itself result in them being considered as acting together in relation to that entity.

See the rulings here and here  (in Danish).

Read our article on a related prior ruling published 23th January 2020 here.

Tags:  Danish Regulation