Unexploited tax losses to be recorded in a central register

03 March 2014

A proposed new bill will force companies to report all unexploited tax losses to the Danish tax authorities.

The Minister of Taxation has recently proposed a bill which will force companies once and for all to report all unexploited tax losses to the Danish tax authorities.

As of the income year 2002, companies have been able to carry forward tax losses without time constraint.

Naturally, all tax losses have been declared but the tax authorities have yet to establish a register in which the declared losses can be specified. However, such a register will be established in connection with digitalisation of the company tax return - if and when the draft bill is passed in Parliament.

According to the draft bill, all companies having unexploited tax losses must report these losses to a new central register. Unreported losses will be irrevocably lost. A 3 month deadline for reporting losses will apply. However, it is still unknown when the tax authorities will open the register for reporting. This will be announced later but it is expected to be in the second half of 2014.

The report must comprise information on the size of unexploited losses computed per company. Further, the income years in which the losses originate must be specified. For companies subject to tax consolidation, reporting must be done by the parent company.

The tax losses appearing on the latest tax assessment must be reported. This applies even if a complaint is pending regarding the tax loss.

Besides unexploited tax losses, companies will be obligated to report information on tax exempt restructurings, tax exempt mergers, demergers and contribution of assets relevant to exploitation of tax losses.

The draft bill provides an option for the Minister of Taxation to grant exemption from the yearly reporting obligation. This may be relevant for companies not subject to tax consolidation, having tax losses for several years.

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge.