On 19 December 2023, the Danish government introduced draft bill L 92 with the goal of synchronizing the roster of jurisdictions affected by Danish defensive tax measures with the EU list of non-cooperative jurisdictions, updated on 17 October 2023. Denmark is tightening its grip on tax avoidance with a revised list of jurisdictions subject to stricter measures. Draft bill L 92, currently under consideration by parliament, adds Antigua and Barbuda, Belize, and the Seychelles to the blacklist while removing Costa Rica, the British Virgin Islands, and the Marshall Islands. This move aligns Denmark’s list with the updated EU roster of non-cooperative jurisdictions.
The defensive measures include:
- Limited deductions: The defensive measures encompass limiting the deduction of payments to non-cooperative jurisdictions.
- Increased withholding tax: The new rules would also increase the withholding tax on dividends paid to recipients in blacklisted jurisdictions. The current withholding tax is 27%, but the new rules would raise it to 44%.
- Beneficial ownership scrutiny: Payments made to intermediaries who pass on funds to blacklisted jurisdictions are also caught in the net.
Additionally, the bill’s accompanying remarks clarify that Russia has been included in the list independently subsequent to the termination of the Double Tax Treaty, starting on 1 January 2024.
Draft bill L 92, currently under consideration by the Danish Parliament, is expected to be approved in January 2024 and will enter into force on 1 February 2024.
