Recently, the Danish Ministry of Taxation has published a legislation with CFC amendments for the implementation of the measure of the EU Anti-Tax Avoidance Directive (ATAD1) and the Directive as amended (ATAD2). Some of the main changes include:

  • The expansion of the control test to including where a taxpayer itself or together with related parties directly or indirectly owns at least 50% of the voting rights, capital, or rights to profit in the CFC;
  • The removal of the current CFC financial asset test (greater than 10% of total assets);
  • A reduction in the financial income test from one-half to one-third (1/3) of total income; and
  • An expansion of the definition of financial income to include other income generated from intellectual property, including income from the sale of goods and services based on intellectual property.

The CFC legislation is applicable from 1 January 2019.