Denmark: Proposal for introduction of relief at source on Danish dividends - update


Further to TaxFlash T18026 concerning the proposed introduction of relief at source on dividend payments on Danish equities, Clearstream Banking would like to inform customers that the Danish Bankers Association (Finans Danmark) and the Danish Ministry of Taxation have now reached an agreement on the new relief at source model for Danish dividends.

The exact details of the new procedure and its implementation are still unclear, but the proposed model includes the following elements:

  • All beneficial owners applying for relief at source are required, as a prerequisite, to apply for a unique identification number, issued by the Danish tax authorities, identifying the relevant shareholder and applicable rate;
  • Eligible beneficial owners will receive dividend distributions with reduced tax rates on payment date, provided that the required registration/documentation has been submitted prior the relevant deadlines;
  • Post payment, random checks will be performed by the Danish tax authorities, and beneficial owners who have received dividend distributions with reduced tax rates on payment date may be requested to provide supporting documentation to prove their eligibility;
  • Banks are liable towards the Danish tax authorities if a spot check shows incorrect withholding of tax or if the requested supporting documentation has not been provided prior to the relevant deadlines.

It is further foreseen that the proposed relief at source model will be submitted for hearing after the summer of 2020.

The entry into force of the new relief at source model is expected to be in 2023-2024.

We continue to monitor the Danish market and will provide further information as it becomes available.

This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice.