A non-Danish association can be issued with a temporary approval of transparency. This means that the association is then exempted from paying tax on dividends from non-Danish companies, associations, etc. Instead, the members become directly subject to tax on income made by the association.
Since there is no legal basis for not withholding dividend tax when dividend from Danish companies, associations, etc. is distributed, a dividend tax of 27% is withheld. (See below for how members may claim a refund for any overpaid divided tax).
Who can apply for a temporary approval of transparency - and how?
A non-Danish association that would be covered by section 1(1) para (6) of the Danish Corporation Tax Act (Selskabsskatteloven) if its domicile was in Denmark, and which can therefore be equated to a Danish account-holding investment fund, can apply for a temporary approval of transparency with the Danish Tax Agency.
Approvals are valid for a maximum of one year.
Please note that if the circumstances of the association change, this must be reported to the Danish Tax Agency and the approval must be returned.
The rules stipulating who can apply for a temporary approval of transparency appear from section 2(12) paras (1-5) of the Danish Corporation Tax Act, which is available in Danish here: The Corporation Tax Act (retsinfo.dk).
Applications for a temporary approval should be submitted digitally via our website.
Complete and submit: Apply for a temporary approval of transparency.
Members may claim a refund for any overpaid divided tax
Members of a non-Danish association with a temporary approval may claim a refund of dividend tax if the dividend tax withheld exceeds the final dividend tax according to a double taxation agreement. When applying for a refund, the temporary approval of transparency must be submitted as documentation that the member is entitled to claim a refund.
You can read more on our page about refund of dividend tax.