Denmark Tax Agency Clarifies Limited Tax Liability on Zero-Coupon Loan Notes Under DTA With Luxembourg

The Danish Customs and Tax Administration June 3 posted online Tax Council Binding Answer No. SKM2024.298.SR, clarifying the limited tax liability on zero-coupon loan notes (ZCLN) under the DTA with Luxembourg. The taxpayer, an investment adviser to a regulated manager, engaged in work with portfolio investments through a structure involving limited partnerships, Luxembourg-based entities, and a Danish holding company. As part of a sale between a Luxembourg-based entity and a Danish holding company, the relevant ZCLN was redeemed with a capital gain. The taxpayer sought clarification on whether the repayment of the ZCLN, from the Danish company to the Luxembourg-based ...