Bill on tax-exempt transfer of enterprises to commercial foundations passed

On 3 December 2020, the Danish Parliament passed the bill that is to implement the working group’s model for succession when commercial enterprises are transferred to commercial foundations.

The working group proposed in its report a specific model according to which shares could be transferred to a commercial foundation without entailing payment of taxes at the time of the transfer. 

The report further described previous practice under which natural persons could transfer shares to non-profit commercial foundations without tax implications if such shares were transferred through a holding company owned by the person in question. 

However, the draft going out for consultation in the autumn of 2019 did not contemplate a continuation of the so-called holding model. Following much criticism, this part of the bill was adjusted and the rules, which have been in the pipeline for a long time, will now finally become a reality with effect as from 1 January 2021.

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