TaxWatch:

Extended deadline for reporting of stocks in foreign deposits

29 June 2021

Morten Neumann Jørgensen, Manager, Tax |

If you have acquired stocks in 2020 via a foreign broker, you must report your acquisition to the Danish Tax Agency no later than 1 September 2021 irrespective of whether the stock has been sold or not. If you do not comply with this, any loss will not be deductible.

Stock trading via Danish financial institutions and stockbrokers is reported automatically to the Danish Tax Agency. On the contrary, this is not the case for trading of stocks and investment certificates in foreign deposits unless the foreign financial institution has made an agreement on reporting with the Danish Tax Agency. Only a handful have made such agreements.

If you own stocks and/or investment funds in a foreign deposit you will be responsible for the reporting of these to the Danish Tax Agency. As such you cannot wait until realization to report any loss or gain. In a recent case of the National Tax Tribunal, a widow was denied an investment tax credit of around DKK 1,700,000 because the investment loss of her late husband’s deposit in Luxembourg had not been reported to the Danish Tax Agency in due time. This caused a tax payment of around DKK 800,000.

The reporting must be done for the year of the stock acquisition and must include information on the acquired stocks (ISIN), quantity of acquired stocks, the acquisition fee and acquisition date.

Normally the deadline of reporting is July 1 the year after the year of the stock acquisition.  However, the deadline for stocks acquired in 2020 has been extended to 1 September 2021 due to COVID-19.