Denmark to Remove The Special Taxing Rules for Banks

The Danish Ministry of Taxes confirmed a message dated May 2, 2019, that all banking institutions in the country would be exempt from paying additional duties on basic hybrid capital, which is placed on deposit, corporate and government accounts.

Earlier, the government introduced special tax duties on capital back in the 2008 financial crisis to support the banking sector. Now Denmark has recognized the fact of improving the economic and macroeconomic climate, which made it possible to remove these taxes. The current decision of the Ministry allows the state and private entrepreneurs to work with both capital and debt obligations.

The Danish government also decided to take such a step after the recommendations of the European Commission, which believes that the removal of fees will avoid contradicting the rules of commercial and banking activities in the EU.

“According to the European Commission, a special tax on the deduction from the main mushroom capital may lead to a special regime on the part of the financial sector. To ensure compliance with the rules of state aid, the Commission asked Denmark to amend the law, ”the Danish Ministry of Taxes said.

 

According to the calculations of the Ministry, the abolition of additional fees will bring to the budget of Denmark 176 million DKK, and already in 2020, this figure will increase to 350 million. Investors and businesspeople who paid a fee for basic hybrid capital, will be eligible for tax holidays until the end of 2020.

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