Denmark Tax Agency Clarifies Interest Deduction Rules for Loan Arrangements

The Danish Customs and Tax Administration Sept. 3 posted online City Court Decision No. SKM2025.485.BR, clarifying interest deduction rules for loan arrangements. The taxpayer, an individual, borrowed an amount from his nonresident company with a running interest rate and submitted a promissory note, which stated that the interest amounts could be added to the principal. Concurrently, the taxpayer’s Danish holding company loaned a corresponding amount to his nonresident company. In connection with the repayment of the taxpayer’s debt to his nonresident company, the taxpayer claimed the right to an interest deduction related to the interest continuously added to the principal. ...