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

Further to our TaxFlash T17025 concerning the possible 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) has now provided a draft proposal (attached below) of the new relief at source model to the market.

The proposed model includes the following:

• 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 pay date, provided the required registration/ documentation has been submitted prior the relevant deadlines;
• Post payment, random checks will be will be performed by the Danish tax authorities and beneficial owners, who have received dividend distributions with reduced tax rates on pay date, may be requested to provide supporting documentation in order to prove their eligibility;
• Withholding tax must be reimbursed to the Danish tax authorities, if incorrect withholding tax has been applied or if the requested supporting documentation has not been provided prior the relevant deadlines.

The introduction of the new relief at source model is expected to be in 2021.

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