Denmark Tax Agency Clarifies Tax Treatment of Hybrid Core Capital Instruments

The Danish Customs and Tax Administration July 9 posted online Tax Council Decision No. SKM2021.377.SR, clarifying the tax treatment of hybrid core capital instruments. A financial institution issued various hybrid core capital instruments and sought clarification as to tax deductions for interest paid, and for the tax treatment of receivables or debts on the transactions. The tax council found that: 1) the issuance of hybrid core capital instruments doesn’t qualify as debt or as receivables under the Capital Gains Act or the State Tax Act; and 2) the hybrid core capital instruments are considered fixed capital under a specific provision ...