CJEU: Danish Exit Taxation Is Contrary To EU Law

In its judgment of 18 July 2013 the Court of Justice of the European Union (CJEU) held that the Danish rules on exit taxation of cross-border transfers of assets within a company are contrary to EU law. New Danish legislation must be expected. Companies that have already suffered exit taxation should consider claiming repayment. 

Background

Under Danish tax law, a transfer of assets internally within a company, e.g. to a permanent establishment outside Denmark to the effect that the assets are no longer subject to Danish tax, is regarded as a sale and is taxed as if the assets had been sold in the year of transfer. A transfer of assets between a company's different establishments within Denmark is not taxed.