On 13 June 2016, the Danish Tax Authorities, as expected, issued administrative guidance confirming that the statute of limitation for Danish dividend withholding tax (“WHT”) reclaims is to be reduced from five years to three years.
The general time limitation period for taxation purposes in Denmark is three years. However, for dividend WHT reclaims in Denmark based on EU law, the statutory time limitation period currently applied is five years, based on the interpretation of the Danish Tax Authorities.
Please refer to our recent Fund Taxation Alert of 10 June 2016 for further details.
Development and news
The confirmed change to the statute of time limitation should align the specific time limitation for WHT reclaims based on EU law to the general time limitation of three years. The statute of limitation is calculated from the date of payment of the tax, which is the tenth of the month following the dividend distribution date.
For instance, under the new guidance, the statute of limitation for dividends paid in September 2013 should be 10 October 2016.
According to the new administrative guidance, the reduced time limitation period should be effective, for WHT reclaims purposes, three months from the moment the guidance was issued (13 June 2016).
WHT reclaims filed in the past and WHT reclaims filed until 13 September 2016 should, however, continue to be subject to the five-year statute of time limitation. All WHT reclaims filed after 13 September 2016 should be subject to the reduced time limitation period of three years.
For the purpose of securing their rights, we would strongly advise claimants to prioritise WHT reclaims for dividend WHT suffered between June 2011 and June 2013 and to file these reclaims before 13 September 2016.
For further information, please do not hesitate to contact us.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.