The Danish government has launched a public consultation on new anti-avoidance rules based on the EU list of non-cooperative jurisdictions. The rules include:

• A restriction on the deduction of payments made to:
  • an associated person that is resident or registered in a jurisdiction listed by the EU as non-cooperative; or
  • a person that is not the beneficial owner and the payment is passed on to a recipient in a jurisdiction listed by the EU as non-cooperative; and
• An increased withholding tax of 44% on dividends paid to:
  • a person that is resident or registered in a jurisdiction listed by the EU as non-cooperative; or
  • a person that is not the beneficial owner and the dividend is passed on to a recipient in a jurisdiction listed by the EU as non-cooperative.

The deduction restriction or increased withholding tax would not apply, however, if the relevant jurisdiction is an EU/EEA Member State or has a tax treaty with Denmark. In this respect, it is noted that Denmark currently has a tax treaty with Trinidad and Tobago, which is a listed jurisdiction. Denmark is planning to terminate this treaty, which would not apply until 1 January 2022 at the earliest.

If approved, the new rules would enter into force on 1 July 2021. Comments are due by 9 December 2020.