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Denmark Tax Agency Explains Taxation of Shareholder Loans as Dividend Income

Aug. 25, 2021, 5:00 AM

The Danish Customs and Tax Administration Aug. 20 posted online National Tax Court Decision No. SKM2021.427.LSR, clarifying the taxation of shareholder loans as dividend income. A Danish company granted loans to its sole shareholder, the taxpayer. The tax agency considered the loans to be dividends, and taxed them as share income, because: 1) the loans weren’t granted as part of a normal business arrangement; 2) the payments weren’t considered reasonable employee compensation; and 3) the company failed to report and withhold taxes on the loans. The taxpayer argued that the dividend income taxation was double taxation, and a violation of ...