In Denmark there is compulsory joint taxation within the group of Danish affiliated companies. This means pooling of income from all companies within the group before company income tax is calculated. There are some conditions, which must be met.
Some of the most important are:
The parent company controls directly or indirectly through companies included in the group more than 50% of the votes of the shares in the subsidiaries, either by ownership or voting agreements.
International joint taxation can be opted. If international joint taxation is chosen, it will have to comprise all foreign companies into the joint taxation. Obviously, such a decision will require thorough pro et con considerations, also as international joint taxation, if chosen, will be compulsory for minimum 10 years.
Danish tax regulation contains safe guards against “double-dip” whereas foreign owned Danish companies (ApS – A/S) will be considered as a transparent entity if the Danish companies qualifies as a transparent entity according to local tax regulation abroad; unless if international joint taxation is opted in Denmark.