Denmark Tax Agency Clarifies Gift Tax Treatment of Tax-Free Share Exchanges, Proportional Demergers

The Danish Customs and Tax Administration April 1 posted Tax Council Binding Answer No. SKM2026.153.SR, clarifying the gift tax treatment of tax-free share exchanges and proportional demergers. The taxpayer, an individual, transferred 10 percent of a company’s shares to his daughter with tax succession and reduced gift tax. The shareholders subsequently planned a tax-free share exchange into a newly established holding company, followed by a fully proportional tax-free termination demerger. The taxpayer sought confirmation that these steps wouldn’t constitute a direct or indirect transfer of the business. Upon review, the Tax Council found that: 1) the share exchange and demerger ...