Contributed By Bech-Bruun
Depending on the structure and needs of the business, that business may be adopted in either a corporate or unincorporated form. The key difference is that a corporation is considered a separate legal person. A separate legal person is characterised by the assets of the business being separate from its owners in such a way that it – in principle, independently of the owners – is possible for the corporation to acquire rights and assume obligations, be a party to litigation as a plaintiff or as a defendant, etc.
As a general rule, only corporations are subject to Danish corporate tax (ie, separate entities for tax purposes), as partnerships, limited partnerships and similar entities are generally treated as transparent for tax purposes and the tax implications therefore directly attach to the owners.
The key forms of non-transparent entities in Denmark are:
There are several transparent business forms in Denmark.
The personal business (also known as sole proprietorship) is the simplest form, as the one owner operates the business and remains liable for its obligations.
Partnerships (“interessentskab” or “I/S”) consist of at least two participants, and all participants must bear unlimited liability for the entity. Each partner will recognise the income of the partnership and will conversely also have a proportional right to depreciate on the partnership’s depreciable assets and will be allowed a deduction for the partnership’s expenses, losses, etc. This type of entity is often used by the consultancy sector (particularly law firms).
This is different from the limited partnerships (“kommanditselskab” or “K/S”) where one or more parties have unlimited liability (also known as “komplementarerne”), while the other participants (known as “kommanditisterne”) have limited liability. This type of entity has often been used for larger investment projects.
Limited partnerships may also take the form of a “P/S partnership” (“kommanditaktieselskab” or “partnerselskab”), whereby the limited liability partners’ (“kommanditisterne”) contribution is issued as shares in the company. In this type of partnership there is also a general partner with unlimited liability. This type of entity is often used for private equity structures where the investors are not interested in a corporate form (for tax reasons) but where the entity form is regulated by law.
A corporate entity is deemed to be tax-resident in Denmark if either of these two criteria is met:
Under Danish tax law, the tax domicile is traditionally based on where the day-to-day management of the company is located and where day-to-day-managerial decisions are made. Several other factors may, however, be considered when determining the place of effective management:
A transparent entity will not itself be subject to corporate income tax, and the participants themselves will be taxed on the basis of their tax residency. It should be noted that participants will be considered to be carrying out business in Denmark if the transparent entity itself carries out business in Denmark and will be taxed accordingly.
The determination of a foreign entity is done on a case-by-case basis. The analysis must be based on the various characteristics of the vehicle. Guidance may, however, be found in administrative and case law.
Danish-incorporated businesses are subject to the Danish corporate tax rate of 22%.
However, ship-owners may opt in to an advantageous tax scheme, the so-called tonnage tax scheme, rather than paying standard corporation tax. Additionally, Danish upstream oil and gas activities are not covered by the ordinary corporate income tax regime but are instead covered by special rules set out in the Danish Hydrocarbon Tax Act.
Lastly, some special types of corporate entities are completely tax-exempt or subject to a lower tax rate.
Transparent Entities owned by Individuals
As for businesses owned by individuals through a transparent entity, the entity will not itself be subject to corporate income tax, but the individuals will be taxed on their own merits (personal income tax) on a proportionate share of the entity's income.
The personal income tax system in Denmark is progressive and therefore varies with a marginal tax rate of approximately 56%.
For independent business-owners, it may be possible to be approved for the more advantageous Business Tax Scheme, whereby commercial expenses are fully deductible in their taxable income and where income which is kept inside the “business ring-fence” is only taxed at 22%.
Danish corporations’ taxable profits are calculated in accordance with the general Danish rules on taxation, in so far as they can be applied to the corporation in question. Danish taxation is based on a net income principle, whereby it is the gross income minus the expenses incurred to acquire the income that is to be taxed.
Generally, a Danish corporation will be subject to Danish tax on its worldwide income in the relevant income year, ie, on an accruals' basis. The income year is usually equivalent to the calendar year, but the company may choose a different income year (staggered income year).
When calculating the taxable income, the general approach is to start with the accounting result, adjusting for income that is not taxed (in full), income that cannot be deducted (in full), as well as accounting depreciations and write-downs and other adjustments that are not considered in the same way for tax purposes as for accounting purposes.
Certain entities are covered by special rules on calculation of taxable profits which take into account the specificities of the entities concerned (eg, co-operatives, certain banks, certain insurance companies, mutual insurance associations).
Denmark does not have a patent box regime.
Most research and development expenses for business purposes are exempt from the general rule that expenses for establishing or expanding are not deductible. The R&D expenses may either be fully deducted in the year the expenses incurred or be subject to depreciation by equal annual amounts in the income year and the following four income years.
Additionally, under certain conditions, it is possible to receive cash payments for the tax value of losses incurred from R&D expenses (however, not more than the actual costs and at most the tax value of DKK25 million).
Thirdly, when acquiring knowhow or patents, the purchaser may either choose to depreciate the acquisition price by up to one seventh in the relevant and forthcoming income years or choose to write off the entire sum immediately.
See 1.4 Tax Rates on the tonnage tax scheme for ship-owners and the Danish Hydrocarbon Tax Act for Danish upstream oil and gas activities.
Additionally, certain types of entities, etc, are covered by special rules which take into account the specificities of the entities concerned (eg, co-operatives, banks, insurance companies, mutual insurance associations).
Losses may be carried forward indefinitely to reduce future taxable income, both income from operations and capital gains (however, certain capital losses may only be used against capital gains from the same source).
Losses can be carried forward and can offset future taxable income by a certain amount (in 2021: DKK8,767,500). A remaining loss exceeding the basic amount may reduce the remaining taxable income by 60%. Any loss that cannot be utilised may be carried forward.
On a change of ownership, a tax loss carried forward may become restricted.
Denmark does not have any carry-back rules in the ordinary corporate tax regime.
Generally, Danish corporations may deduct interests.
However, deductions of financing costs are subject to certain limitation by the following rules:
The rule on thin capitalisation limits the possibility of deducting interests or capital loss on controlled debt. A corporation or a Danish tax group is generally considered thinly capitalised if the ratio between debt and net capital exceeds a 4:1 ratio.
Interest Ceiling Rule
Under the interest-ceiling rule, net interest expenses of DKK21.3 million should always be deductible. It should be noted that the term "interest expenses" comprises expenses other than strict interest payments.
If net interest expenses exceed the de minimis threshold of DKK21.3 million (following the application of the thin-capitalisation rule), net interest expenses should be deductible to the extent that they do not exceed the interest ceiling. The interest ceiling should be calculated as the tax value of the Danish tax group’s qualifying assets, multiplied by a standard interest rate which is adjusted and published each year. The standard interest rate for 2021 is 2.3%.
The tax value of the group’s qualifying assets should include the tax book value of depreciable assets plus improvement costs of non-depreciable assets, work in progress, trade receivables less trade creditors, tax losses carried forward and accounting value of financially leased assets.
In general, an interest disallowance under the interest ceiling rule should be permanent (ie, the disallowed amount should not be carried forward to later periods for offset against taxable income).
The “EBITDA” Rule
Under the EBITDA rule, the deductibility of net interest expenses (following the application of the thin-capitalisation and interest-ceiling rules) should be limited to 30% of the EBITDA. The 30% ratio may be replaced by the actual EBITDA ratio of the consolidated Danish tax group if more favourable.
A DKK22.3 million de minimis threshold should apply with respect to the EBITDA rule (ie, where the group’s interest capacity is less than DKK22.3 million, interest expenses of up to DKK22.3 million should be deductible, irrespective of the EBITDA rule).
Disallowed interest under the EBITDA rule may be carried forward indefinitely and re-activated in future years, while unused interest capacity may be carried forward for a maximum of five years.
All Danish corporations, etc, within a group are subject to mandatory joint taxation. Any permanent establishments and Danish real estate held by foreign-controlled corporations are also subject to mandatory joint taxation.
Voluntary (international) joint taxation is also an option for foreign corporations, etc, who are part of a group with Danish corporations.
Capital gains and losses are, as a general rule, included in the taxable income of corporations.
Specifically on Gains on Share Sales
As for gains and losses that corporations realise on the sale of shares, the shares fall into one of the following categories:
Own shares, group shares, subsidiary and tax-exempt portfolio shares are exempt from tax on capital gains from the sale of shares, and losses are not deductible.
Gains from the sale of taxable portfolio shares are fully taxable, whereas any losses will in general be deductible (according to a mark-to-market principle).
Shares held in a professional capacity will – irrespective of the above-mentioned categories on ownership – be taxable for the corporation.
As a result of the tax exemptions previously described, Danish law includes a number of anti-avoidance rules to prevent – among other things – the qualification of taxable dividends to tax-exempt capital gains on the sale of shares.
Stamp duties constitute a fixed fee and a percentage of the asset’s value. A registration of a transfer of real estate is subject to registration duties.
Apart from that, Denmark has abolished most of its stamp duties. For example, a sale of shares will no longer be subject to any stamp or capital duty. There are, however, a few stamp duties, eg, in connection with some insurances and registration of rights in land, such as a real property mortgage deed.
Supplies of services or goods are subject to a 25% value-added tax (VAT) on the invoiced amount. Most Danish services and goods are subject to the VAT; however, the supply of real estate (with the exception of newly constructed real estate and building plots) and the supply of financial services and products is generally not subject to VAT.
Corporations that provide VAT-exempt services may however be liable to pay payroll tax generally based on the total payroll.
Excise duties are levied on several different products when imported to Denmark.
Owners of non-residential properties are also subject to land tax (grundskyld) and, in some cases, also a cover charge (dækningsafgift).
If a corporation has employees, the corporation must, as an employer, also make ATP contributions and social security contributions.
Energy taxes also apply to Danish companies and can be based on emission or energy consumption, for example.
Generally speaking, a closely held business will often operate as a corporate entity. However, many professional service firms operate in a non-corporate form.
The taxation of corporations, etc (that are individual taxable persons for Danish tax purposes) is covered by the principle of economic double taxation. First, the corporation is taxed (22%). Secondly, when the income is distributed to the shareholders (eg, dividends, sale of shares, liquidation profits), the income will generally be taxable for the shareholders.
The consequence of this double taxation is that the taxation of individuals will be the same, whether they operate in a corporate or non-corporate form.
There is case law which prevents “true salaried employees” and board members from operating in a corporate form.
Danish law does not include any rules that prevent closely held corporations from accumulating earnings for investment purposes.
Tax on Dividends
Individuals are taxed on dividends received from corporations, irrespective of the holding percentage and the holding period.
Tax on Gains on the Sale of Shares
Individuals are taxed on the gains on the sale of shares, and losses are deductible, irrespective of the holding percentage and the holding period. However, losses on publicly listed shares are limited to deduction of positive share dividends and gains on the sales of other listed shares.
As for shares held in a professional capacity, individuals and/or corporations will – irrespective of the above-mentioned categories on ownership – always be taxable.
Both dividends and gains from sales of shares are considered share income and are taxed as follows:
For married couples, their total basic amount is DKK114,400 (in 2022).
See 3.4 Sales of Shares by Individuals in Closely Held Corporations.
For dividends and gains on sale of shares, there is the possibility of a special share savings account with a ceiling of DKK103,500 (in 2022), whereby individuals have the opportunity to invest in listed companies and pay a more favourable tax of 17%, for Danish tax residents (and 15% for individuals subject to limited tax liability).
The individuals will be taxed according to a mark-to-market principle, ie, the individual will basically be taxed on the difference between the value in the beginning and end of the income year (including dividends in this period), and not on the basis of the actual sale of the shares.
The general withholding-tax rate is 27% in 2022, irrespective of the ownership of the corporation. The 27% will be reduced (by reclaim) to 22% in the case of a corporate recipient. The withholding tax may be subject to further reduction, or even exemption (the latter under domestic law), if the recipient is a corporate shareholder with a qualifying shareholding (and provided that the EU Parent Subsidiary Directive and/or a tax treaty prescribes for a reduction). A non-resident company is entitled to claim a dividend tax refund from the Danish tax authorities of the tax withheld in excess of the applicable tax rate.
If applicable, the tax on interest must be withheld at a rate of 22% in 2022 (but may be subject to further reduction under either domestic law or a tax treaty).
The withholding tax requirement applies only to controlled debts.
The withholding tax rate on royalties is 22%, in 2022, if applicable (but may be subject to further reduction under either domestic law or a tax treaty).
Royalties deriving from sources in Denmark will be subject to Danish tax if a non-resident individual is the recipient.
The primary tax-treaty country used by foreign investors to make investments in local corporate stock or debt is Luxembourg.
Where a non-treaty country resident might be subject to tax on capital gains and/or dividends, an intermediate entity from a treaty-country may in principle be interposed, in order to benefit from tax treaties and/or EU directives. However, the intermediate holding company would have to be considered as the beneficial owner and not be disregarded under the Danish general anti-avoidance rule (GAAR) (see 7.1 Overarching Anti-avoidance Provisions).
Denmark generally applies a very strict beneficial-ownership test which involves looking at the actual funds' flow. In recent years, the Danish tax authorities have had a significant focus on the issue and currently several cases are pending at the Danish courts with respect to how the term ”beneficial ownership” should be determined and, furthermore, a number of judgments by the Danish courts have recently been rendered on the issue.
It is therefore advisable to pay great attention to this issue before implementing such a structure.
For larger groups, mandatory TP documentation must be submitted no later than 60 days after the tax return. Failure to provide accurate TP documentation will result in the tax authorities being allowed to make a discretionary assessment.
Business restructurings are subject to close scrutiny by the Danish tax authorities.
There is a risk that a related-party limited-risk distribution arrangement for the sale of goods or provision may be challenged by the Danish tax authorities.
This might be the case if the agreement does not actually reflect the real functions and risks of the parties. Additionally, a restructuring whereby a sole distributor is changed into a limited-risk distributor with the same non-resident entity might be considered a transfer of functions, risks and/or assets (that the local entity based on the arm’s-length principle should have been remunerated for).
The Danish transfer-pricing rules and documentation requirements are based on the OECD standards. Additionally, Denmark has issued a statutory order on documentation of the pricing of controlled transactions and Danish transfer-pricing (TP) documentation guidelines, which generally comply with the OECD guidelines (but additional requirements may apply in some instances).
Submission of transfer-pricing documentation (master and local file) is mandatory and must be made within 60 days after the deadline for submitting the tax return. However, purely local transactions (ie, involving only Danish entities) have with new legislation become exempt from this submission requirement.
A company is always obliged to inform the Danish tax authorities about all intra-group transactions in their tax return.
A Mutual Agreement Procedure (MAP) is available both through most double-taxation treaties that Denmark has entered into and through the European Arbitration Convention and the EU Arbitration Directive (2017/1852).
An MAP may be used to address transfer-pricing disputes as regards the determination of whether transfer-pricing adjustments to controlled transactions are justified, and how the adjustments should be determined.
The Danish tax authorities generally accept MAP procedures, but will often require a large amount of information before initiating an MAP.
A compensating adjustment, ie, an adjustment in which the taxpayer reports a price that is, in the taxpayer’s opinion, an arm’s-length price, even though this price differs from the amount actually charged between the associated enterprises, is not a scheme that has been put in place in Danish law.
The basic principle is that the pricing in transactions between associated enterprises should reflect the arm’s-length pricing. The Danish tax authorities will therefore most likely not respect a taxpayer’s own adjustment of a transaction that in fact did not reflect the arm’s-length principle.
Non-local corporations may conduct business in Denmark without incorporating a Danish limited-liability company via a divisional office with a separate management, ie, a branch. The branch is not regarded as a separate legal entity, but as a part of the foreign company.
While a Danish subsidiary in itself is considered a taxable person and is subject to full tax liability, a local branch is not a separate taxable person. The non-resident company will be subject to limited tax liability on the business profits through a permanent establishment in Denmark (a Danish-registered branch will most likely also be considered a permanent establishment).
A Danish branch may, however, be re-qualified as a separate taxable person under certain conditions, as a means to avoid tax-avoidance.
A permanent establishment (PE) is taxed on the same basis as a Danish company, as the profits from each entity will be subject to corporate income tax (22%).
After payment of corporate income taxes, profits from a branch may be repatriated without Danish withholding tax.
As for subsidiaries, dividend distributions or capital gains from the Danish subsidiary will – under certain conditions – be tax-exempt.
Capital gains on shares should generally not be subject to Danish limited tax liability if the shareholder is a non-resident individual or corporation. Capital gains may, however, be taxable if the shares are in fact held by a permanent establishment in Denmark.
It should be noted that a sale of shares to the issuing company will generally be deemed a dividend distribution – as will the transfer of shares between jointly controlled companies – if the transferring company does not qualify as the beneficial owner of the Danish shares.
Furthermore, a sale of shares followed by a reinvestment could be deemed to constitute a dividend distribution, which would entail that withholding tax could be imposed.
In general, a disposal of an indirect holding of shares higher up in the group (and therefore the transferring of control) should not trigger any adverse tax consequences.
However, on a change of ownership, a tax loss carried forward may become restricted.
The determination of income of foreign-owned Danish affiliates is not based on any special formulas.
Deductions for payments by local affiliates for management and administrative expenses are covered by the general Danish tax regime, ie, costs for acquiring, securing or maintaining the income, will in general be fully deductible in the taxable income. Provided the payment is on arm’s-length-terms, the payment to the non-local affiliate should be fully deductible. Such expenses are from time to time contested by the Danish tax authorities.
All controlled transactions should be in accordance with the arm’s-length principle. Therefore, loans within a group should reflect market value. This would mean in particular in terms of interest rates.
Related-party borrowing may be subject to constraints under the thin-capitalisation rules, the interest-ceiling rules or the EBITDA rule. See more details in 2.5 Imposed Limits on Deduction of Interest.
Danish tax law employs a limited territoriality principle, whereby income from immovable property or permanent establishments outside of Denmark is exempt from corporate tax. Other income sourced outside Denmark is taxable under the normal tax regime.
There are, however, some exceptions to this rule including, for example:
There is no specific Danish principle to determine how local expenses should be allocated to exempt foreign income. To the effect that such expenses have been incurred and can be allocated to exempt income, the expenses are not deductible. Denmark will use the principle from the OECD Model Tax Treaty Article 7 (2) when determining the attributable expenses to the foreign permanent establishment.
As a general rule, dividends from foreign subsidiaries will be tax-exempt for a Danish corporation, provided the shares are either group shares or subsidiary shares (ie, an ownership threshold of a minimum of 10% in the foreign subsidiary) and provided that the subsidiary is resident of the EU or a country that has an tax treaty with Denmark. The tax exemption also provides that the foreign subsidiary is not entitled to claim a deduction for the dividend.
Intangibles developed by a Danish corporation and used by non-local subsidiaries must be subject to remuneration at an arm’s-length price. The payment from the non-local subsidiary to the Danish corporation will be taxable income for the Danish corporation. Normally, the imputed payment would be in the form of a deemed royalty or a deemed transfer.
The Danish (Controlled Financial Company) rules mean that Danish parent companies will be subject to CFC taxation on income in certain subsidiaries and permanent establishments with mobile income.
The CFC rules also apply to foreign permanent establishments.
As described in 7.1 Overarching Anti-avoidance Provisions, the Danish GAAR applies where an arrangement is not genuine (ie, not put into place for valid commercial reasons which reflect economic reality). Therefore, dividend or interest payments from a Danish corporation to a non-local affiliate (without any economic substance) might result in the arrangement being disregarded due to the GAAR.
If the non-local affiliate is organised as a corporation, any capital gains will as a general rule be tax-exempt for a Danish corporation, provided the shares are either group shares, subsidiary shares or tax-exempt portfolio shares: see 2.7 Capital Gains Taxation. The non-local affiliate should be a resident of a country within the EU or with which Denmark has a tax treaty.
Danish law includes a number of anti-avoidance provisions including, eg, rules on thin capitalisation, CFC taxation, and others.
Additionally, Danish law includes a general anti-avoidance rule (GAAR). The GAAR includes both a general anti-avoidance provision (implementation of the EU Anti-Avoidance Directive (2016/1164) Article 6) and a specific provision on the abuse of double-taxation treaties.
According to the GAAR, Danish companies and co-operatives, etc, are required to disregard arrangements or a series of arrangements when calculating the taxable income/assessing the tax consequences if the arrangement or series of arrangements have been implemented with the main purpose, or one of the main purposes, to obtain a tax benefit which violates the content or purpose of tax law and which cannot be considered genuine in consideration of the factual circumstances.
An arrangement may consist of several steps or parts.
Generally, an arrangement or a series of arrangements cannot be considered genuine in consideration of the factual circumstances if it has not been put in place for valid commercial reasons which reflect the economic reality.
The Danish GAAR was introduced with effect from 1 May 2015 and amended as of 1 January 2019 to include not only the EU tax directives – the EU Parent/Subsidiary Directive (2011/96), the EU Merger Directive (2009/133) and the EU Interest-Royalty Directive (2003/49) – but to include all arrangements.
Denmark generally applies a very strict beneficial-ownership test looking at the actual funds' flow. In recent years, the Danish tax authorities have had a significant focus on the issue of beneficial ownership and currently several cases are pending at the Danish courts with respect to how the term ”beneficial ownership” should be determined and, furthermore, judgments by the Danish courts have recently been rendered on the issue.
Denmark has implemented the EU regulations and directives that stipulate the accounting, auditing and financial reporting requirements.
Danish law does not, however, include a regular routine audit cycle. The Danish tax authorities have a general right to reassess tax statements for previous income years until May 1st in the fourth year after the relevant income year. An additional two years applies to reassessment of controlled transactions (ie, transfer-pricing issues).
It should be noted that in exceptional cases (eg, gross negligence or intent to evade tax) the tax authorities may investigate and resume completed income years. In this case, an ultimate statute of limitation period of ten years applies.
Danish law already includes a number of BEPS-recommended changes. The Danish government’s attitude towards the OECD’s BEPS project has generally been positive and is aimed at following and implementing the remaining BEPS recommendations in Danish law.
The current Danish government is generally positive towards BEPS.
Pillar One of BEPS II includes, among other things, rules on profit allocations and nexus and entails that any digital services taxes and other similar measures should be repealed. Denmark does not currently have a specific digital services tax and the impact of this pillar is therefore not critical for the Danish tax system.
Pillar Two includes the global minimum tax rate. The current Danish government has expressed support for the adoption of an ambitious global minimum tax rate with a broad scope. If it is not possible to reach an agreement on this matter in the OECD, the Danish government is willing to find a solution at EU level.
See also 9.12 Taxation of Digital Economy Businesses.
International tax has a very high priority and public profile amongst both the politicians and by the Danish tax authorities. Implementation of BEPS recommendations is therefore, in general, highly supported by the Danish lawmakers.
Despite any objectives of a competitive tax policy, it is expected that BEPS will continue to have a high priority.
As the Danish tax system is relatively on par with the EU standards it is not expected that the system will be particularly vulnerable.
Denmark has already implemented a regime on dealing with hybrid mismatches which reflects the BEPS recommended actions and the EU Anti-Avoidance Directive I (2016/1164) and EU Anti-Avoidance Directive II (2017/952).
Danish tax law employs a limited territoriality principle, whereby income from immovable property or permanent establishments outside Denmark is exempt from corporate tax. Other income sourced outside Denmark is taxable under the normal tax regime.
See further details in 6.1 Foreign Income of Local Corporations.
The new Danish CFC rules are to a large extent EU-conformant and are believed to be in line with the territorial principle.
As described in 7.1 Overarching Anti-avoidance Provisions, Danish law includes anti-avoidance rules which impact all arrangements and all investors (both inbound and outbound). These rules will certainly have an impact for particularly inbound investors.
The taxation of profits from intellectual property (IP) is a particular source of controversy in Denmark and subject to a number of TP audits and disputes. This is particularly the case for large tech companies with small local sales and marketing entities where the Danish tax authorities generally require a larger level of profit to the Danish entity.
Transparency and country-by-country reporting are considered in Denmark as meaningful and effective tools to reach the aims of the BEPS project.
No proposals or amendments of Danish law regarding the taxation of digital economy businesses have currently been made.
The Danish government has expressed that the OECD, including the BEPS 2.0 project, is still considered the best option for a sustainable and long-term solution to this issue, which is a global issue.
If it is not possible to reach an agreement on this matter in the OECD, the Danish government is willing to find a solution at EU level.
Denmark has agreed to the OECD Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy of October 2021. It is expected that the agreement will be implemented in co-ordination with the other EU countries (through EU directives). The Danish government has expressed a wish for quick implementation.
The issue of taxation of digital economy businesses is expected to be an ongoing political discussion, both locally and on an international basis.
No proposals or amendments of Danish law regarding digital taxation have currently been made. This matter is, however, an important issue, being discussed locally and on an international basis.
Offshore IP should be taxed in the form of reduced deduction for royalties or withholding tax on the royalties. Denmark operates with both possibilities, and it is a fair assumption that IP in tax havens will be more easily subject to the full Danish withholding tax on royalty payments.