Denmark Tax Agency Clarifies Tax Liability for Cross-Border Corporate Merger

The Danish Customs and Tax Administration Feb. 21 posted online Tax Council Binding Answer No. SKM2025.86.SR, clarifying the tax implications of an intended cross-border tax-free merger between a Danish contributing company and a Luxembourg receiving company. The taxpayer, a Danish company, sought clarification on whether the tax-free merger could be implemented without the Luxembourg company being subject to limited tax liability on dividends received as consideration for the cancellation of shares in the Danish company. The Tax Council held that: 1) the Luxembourg company wouldn’t be subject to limited tax liability on dividends in connection with the cross-border tax-free merger; ...