News and Updates
Autumn update on Danish tax law
The Danish Parliament passed a bill and has implemented this year a number of positive changes to Danish company law. The amendments were aimed at simplifying the administration procedures for companies and at the same time make it easier to start a business in Denmark.
New Danish Entity and reduction in ApS Capital Requirements
Introduction of a new company form called "iværksætterselskab" or IVS (entrepreneur company), with a minimum share capital requirement of DKK 1 (appr. EUR 0.15), with the condition that the share capital is increased to DKK 50,000 (appr. EUR 7,000) through normal operations before paying any dividends. Once the company reaches the required minimum share capital it can be converted to an ApS.
The Danish ApS is a normal private limited company (such as the Dutch BV, the German GmbH, the English Ltd). The IVS company form operates under the same rules that apply for the Danish ApS. There is therefore no difference between an IVS and an ApS, apart from the required minimum start-up capital. The IVS can easily be used as a holding company.
The minimum share capital requirement for an ApS has been reduced from DKK 80,000 (appr. EUR 11,000) to DKK 50,000 (appr. EUR 7,000).
New Rules for Re-domiciliation
Rules concerning the transfer of the corporate seat of companies (re-domiciliation) have been introduced allowing companies to move to or from Denmark, to or from another EU state (which was only permissible for SE companies).
Denmark is decreasing the Corporate Income Tax
The Danish Parliament passed into law a growth plan bill in order to increase Denmark’s competitive ability. The law reduces the corporate income tax rate from the 2013 rate of 25% to 22% over a three-year period (24.5% in 2014, 23.5% in 2015 and 22% in 2016).
Audit Exemption for ‘Small’ Holding Companies
We would also like to address the possibility for ‘small’ holding companies to avail of the audit exemption. Until last year, Danish holding companies were not eligible to apply for an audit exemption, however this is now available for holding companies that are considered ‘small’, even if they exercise significant influence over other companies.
A company is seen to exercise significant influence if it holds 20% or more of the voting rights in another company.
Holding companies are considered to be ‘small’ if the holding company and its subsidiaries (the companies it exercises significant influence over), together do not exceed two of the following three amounts at the date of the balance sheet:
1. a balance sheet total of DKK 4 million (appr. EUR 537,000)
2. revenue of DKK 8 million (appr. EUR 1,074,000)
3. an average number of full-time employees of 12 during the financial year
For other preliminary inquiries on tax matters or company formation please contact
• Andrew Woods (A.Woods@SheltonsGroup.com) or
• Stefano Oragano (S.Oragano@SheltonsGroup.com)