Taxation
The Danish government is committed to international cooperation in taxation and to implement OECD recommendations on base erosion and profit shifting (BEPS). Denmark will continue to participate in the exchange of common report standard (CRS) information and country-by-country reports between tax administrations. Denmark also supports the EU proposal on public country-by-country reporting and the EU list of non-cooperative jurisdictions in taxation matters.
Completion Status:
Commitment filtering:
It is specified that Denmark will continue to engage in the exchange of CRS information through country-by-country reporting. It is clear that Denmark has been explicitly committed to support EU proposals on country-by-country reporting and the EU’s list of non-cooperative jurisdictions in taxation matters.
The first part of commitment 6 is indeed measurable as it possible to access whether or not the Danish Ministry of Taxation has implemented the OECD recommendations on BEPS. It is possible to measure whether Denmark succeeds in implementing OECD recommendations on BEPS. Also, it is possible to evaluate whether Denmark continuously participates in general international cooperation by, for example, monitoring the number of activated exchange relationships of relevant jurisdictions.
Denmark
Evaluation:
Denmark continuously and actively follows developments in BEPS action points through relevant OECD working groups. Since the start of the BEPS project, Denmark has incorporated the various relevant BEPS action points into Danish law. For example, Denmark has recently ratified and implemented the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS and the three-tiered transfer pricing documentation format. As for the recommendations on anti-avoidance rules,[1] Denmark already had comprehensive anti-avoidance rules, and these have been adjusted in line with the EU anti-tax avoidance directive.
Denmark has continuously participated in the automatic exchange of information for tax purposes through the CRS framework since the first exchange in 2017. Denmark is rated compliant and has activated exchange relationships with over 100 jurisdictions. Denmark has continuously participated in the automatic exchange of information for tax purposes through the country-by-country framework since the beginning of the project. Denmark is rated compliant with the standard and has activated exchange relationships with 76 jurisdictions. Denmark supports the European Commission’s proposal to establish a scheme where certain corporations and permanent establishments are required to publish information about their turnover, revenue and how much tax the corporations have paid in the countries in which they have commercial activities to further promote transparency and limit tax avoidance.
The EU list of non-cooperative jurisdictions is considered an important tool in countering tax evasion and tax avoidance. By effectively encouraging third countries to implement tax transparency and international tax standards in their tax systems and by targeting the jurisdictions that do not follow the international standards, tax havens become less attractive. It is a high priority for the Danish government to ensure the continued use and effectiveness of the list by regularly evaluating whether the relevant procedures, criteria and measures are sufficiently effective as well as up to date with the improving international standards
Challenges to effective commitment implementation
With regard to BEPS action 12, this was carried out through the implementation of the DAC6 directive (EU Directive 2011/16/EU on Administrative Cooperation in the Field of Taxation) in 2019, with effect from 1 July 2020. Denmark has, however, postponed the reporting deadline, in line with the recommendations from the EU, due to the COVID-19 pandemic.
[1] Including hybrid mismatch, CFC-rules, general anti-avoidance rules and interest deduction limitation rules