Multinational corporations have already found a loophole in a new Danish tax law designed to increase tax revenues by DKK2 billion per year, it has been reported in the national media.
The law was designed to prevent Danish companies from deducting losses in foreign subsidiaries while keeping foreign profits out of their domestic accounts.
However, according to Danish broadcaster DR, several companies are exploiting loopholes in the law, with the report naming Scandinavian Tobacco Company as one culprit. The report also stated that Minister for Taxation Kristian Jensen is under pressure to raise more in revenues following a cut in corporate tax to 28% from 30%.
Following changes to its holding company legislation in 1999, Denmark has become one of the most attractive places in Europe in which to locate a holding company.
A comprehensive report in our Intelligence Report series looking at Tax-Effective Global Manufacturing and Financing Structures is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report8.asp
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