- 19 May 2016
The Danish Parliament has now passed a bill which will, in principle, revive the favourable tax regime for share-based remuneration under the former section 7H of the Danish Tax Assessment Act which was repealed in November 2011. The new regime will enter into force on 1 July 2016.
In March 2016, the Danish Minister for Taxation tabled a bill to introduce a favourable tax regime for shares as well as options and warrants awarded to employees in the course of their employment.
This bill was adopted by the Danish Parliament on 12 May 2016. During the committee stage, a few linguistic amendments were made, but the contents of the new Act are the same as those of the Bill.
The new tax regime – which essentially corresponds to the regime provided by section 7H of the Danish Tax Assessment Act which was repealed in November 2011 – will provide a framework for awarding shares, options and warrants which will not be taxable for the employee until the shares are sold, and then as capital gains and not as personal income.
In order to qualify for the new regime, a number of conditions must be met, including that the employer and the employee must agree in writing that the share-based remuneration awarded will be subject to the new regime. The new regime will only apply to agreements concerning award of share-based remuneration which are concluded on 1 July 2016 or later.