Denmark Legal Update Q3 2020

TAX, COVID-19, AND INTERNATIONAL STRUCTURES AND WORK PATTERNS

The COVID-19 crisis and restrictions on international mobility affect a number of tax rules relating to international structures and work patterns. The Danish Tax Agency has now issued guidelines describing how the crisis affects Denmark’s interpretation of double taxation treaties in relation to permanent establishment, place of management, natural persons’ tax residence, and income from employment earned by natural persons working in more than one country.

Published 10 July 2020

PROPOSED CHANGES TO RULES ON RESTRUCTURING

On 3 July 2020, the Danish Bankruptcy Council (an advisory board to the justice department) proposed to change the rules on restructuring to make them more flexible and easier to use for the intended purpose. Some of the proposals are previous proposals which are now being reintroduced by the Bankruptcy Council and some of them are new, being necessitated i.a. by the impact of the COVID-19 pandemic on Danish businesses. Below is a summary of the proposed changes.

Published 10 July 2020

"REGULATORY PACKAGE" INTRODUCES NEW RULES ON RETENTION OF CORPORATE DOCUMENTS

The new “regulatory package” aimed at strengthening company and accounting regulation amends i.a. the Danish Companies Act, the Danish Financial Statements Act, the Danish Act on Approved Auditors and Audit Firms, and the Danish Consolidated Act on Certain Commercial Undertakings. The package enters into force on 1 January 2021. The requirement for a five-year retention period for “corporate documents” will affect all companies. Learn more about the duty of retention, the consequences of breaching the duty, and the other new rules introduced by the package.

Published 11 August 2020

NEW POST-BREXIT APPLICATION PROCEDURE FOR INVESTMENT SERVICES IN DENMARK

Upon expiry of the current transitional period on 31 December 2020, UK credit institutions and investment firms will no longer (unless an agreement to the contrary is entered into between EU and UK) have access to provide investment services in Denmark, unless authorised by the Danish Financial Supervisory Authority under the national regime in Section 33 of the Danish Financial Business Act.

Published 21 August 2020

SPONSORSHIP TO A BADMINTON CLUB CONSIDERED AS BRIBERY

In a recent judgment by the Court of Aarhus, an administrative manager in the Municipality of Aarhus and a municipal supplier were given suspended sentences with a community service condition for having accepted and paid bribes. The bribery involved i.a. the award of a sponsorship to a badminton club, having a total value of DKK 210,000. Participation in a golf trip to Sweden, on the other hand, was held to serve a business purpose and, therefore, did not amount to bribery. The judgment shows which specific elements are taken into account by the courts when assessing whether hospitality and supplier-sponsored events constitute bribery. Read our analysis of and comments on the judgment, which is the latest in a series of decisions dealing with bribery of Danish officials.

Published 9 September 2020 

DENMARK: TAX ON DIVIDENDS TO CHARITABLE ORGANISATIONS INCOMPATIBLE WITH EU LAW

The Danish Government has accepted that a tax of 22 % on dividends paid to charitable organisations established in the EU/EEA conflicts with EU law. A bill will be introduced in December 2020 to exempt those organisations from tax on dividends.

Published 18 September 2020

ONLINE PLATFORMS COMMIT TO REMOVE MINIMUM PRICES

Happy Helper and Hilfr have committed to remove minimum prices for the cleaning services offered via the companies’ platforms. These commitments are made in the aftermath of the Danish Competition and Consumer Authority’s (Konkurrence- og Forbrugerstyrelsen) concerns about the platforms’ use of fixed minimum rates as part of their terms and conditions.

Published 24 September 2020