Denmark: Foreign corporations eligible for a reduced withholding tax rate

08.07.2016

Clearstream Banking1 informs customers that effective

1 July 2016

a law amendment L 123 was passed on 2 June 2016 by the Danish Parliament, implying that foreign corporations can now benefit from the same reduced withholding tax rate of 22% on dividends from Danish equities as Danish corporations, instead of the current rate of 27%.

The amended law brings Danish legislation into line with EU legislation, which requires that EU/EEA investors receiving dividends are treated equally in taxation.

The amendment will as well be applicable to corporations that are resident outside of the EU/EEA.

Impact on customers

The general withholding tax rate applied to non-residents will remain at the current rate of 27% on dividend distributions from Danish equities. However, in accordance with the amended legislation, EU/EEA foreign corporations, that are not covered by any Double Taxation Treaty are now eligible to obtain a reduced rate via a standard reclaim retroactively as follows:

Tax year

Tax rate applicable:

2007 to 2013

25%

2014

24,50%

2015

23.50%

2016

22%

Foreign corporations that are not EU/EEA resident are only eligible to obtain a reclaim for payments as of 1 July 2016 and not for past payments.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.