Distributing investment funds

If you want to set up a new account-holding investment fund, you can request a CVR number at virk.dk.

At virk.dk, you can also request administrative SE numbers for new funds and unit classes in both a new and an existing account-holding investment fund.

If you want to establish an distributing investment fund allowing for an annual minimum dividend distribution and with the civil law status of a value fund, you have to send us a request. 

You do so via form 40.118: Creation of SE numbers for new value funds. The form tells you which information to include. Please note that this form is currently only in Danish.

If you want to opt in for tax purposes as a distributing investment fund with annual minimum dividend distribution, you have to let us know. Please submit such notification by no later than 31 December of the calendar year preceding the calendar year from which the notification is to apply.

A newly established distributing investment fund may be subject to minimum dividend distribution status as early as the calendar year in which it was established. However, this requires this option to be chosen at the time of establishment. Notification of the option chosen must be submitted no later than two months after establishment, but no later than 31 December of the year of establishment.

Notification of opting for the status of a distributing investment fund with annual minimum dividend distribution must be submitted together with information on whether it is share-based or bond-based.

You can send the notification via E-tax for businesses:

1. Log on to E-tax for businesses
2. Select Contact
3. Select Write to us
4. Select Companies, funds and associations
5. Select Aktier, anparter, udbytte-, royalty-, rente- og kursgevinstskat (Shares, units, dividend, royalty, interest and capital gains tax)
6. Select Investeringsforeninger og investeringsselskaber (ikke A/S eller ApS) (Investment funds and investment companies (not A/S or ApS)
7. Write your message and select Send.

When you have the tax status of a distributing investment fund with annual minimum dividend distribution with us, you have to submit information annually, including a statement of the minimum income and an annual report. You must also submit a statement of the distribution of the assets, showing the distribution between shares and bonds owned by the undertaking.

You have to submit the information to us no later than 2 months after the collective investment undertaking’s approval of the annual financial statements, but no later than 30 June of the year following the calendar year from which the minimum income originates.

If you don't submit the information in due time, the fund will be deemed not to have complied with the requirements for tax status as a distributing investment fund with annual minimum dividend distribution. As a consequence, it will instead have the tax status of an investment company. The transition will take effect from the end of the income year.

For non-Danish distributing investment funds with annual minimum dividend distributi it applies that if the fund hasn't submitted the statutory information in due time, it will no longer be considered to be subject to Danish tax rules.

You can submit the information via E-tax for businesses:

1. Log on to E-tax for businesses
2. Select Contact
3. Select Write to us
4. Select Companies, funds and associations
5. Select Aktier, anparter, udbytte-, royalty-, rente- og kursgevinstskat (Shares, units, dividend, royalty, interest and capital gains tax)
6. Select Investeringsforeninger og investeringsselskaber (ikke A/S eller ApS) (Investment funds and investment companies (not A/S or ApS)
7. Write your message and select Send.

If the distributing investment fund no longer meets the conditions for being a distributing investment fund with annual minimum dividend distribution, or if it changes tax status, you have to notify us.
The change of tax status doesn't take effect until 1 January of the year following the calendar year in which we received the notification of the change of status.

You can notify us of a change or termination via E-tax for businesses:

1. Log on to E-tax for businesses
2. Select Contact
3. Select Write to us
4. Select Companies, funds and associations
5. Select Aktier, anparter, udbytte-, royalty-, rente- og kursgevinstskat (Shares, units, dividend, royalty, interest and capital gains tax)
6. Select Investeringsforeninger og investeringsselskaber (ikke A/S eller ApS) (Investment funds and investment companies (not A/S or ApS)
7. Write your message and select Send.

To ensure correct taxation of the members of distributing investment funds with annual minimum dividend distribution, you can notify us if:

• A share-based distributing investment fund with annual minimum dividend distribution changes classification to bond-based.
• A bond-based distributing investment fund with annual minimum dividend distribution changes classification to share-based.

On a change in the classification from bond-based to share-based, you must be aware that the assets and liabilities of the distributing investment fund are considered to have been acquired at the original acquisition date and at the original acquisition price.

The transition from either share-based or bond-based will not take effect until the end of the income year in question.

You can subit information of classification via E-tax for businesses:

1. Log on to E-tax for businesses
2. Select Contact
3. Select Write to us
4. Select Companies, funds and associations
5. Select Aktier, anparter, udbytte-, royalty-, rente- og kursgevinstskat (Shares, units, dividend, royalty, interest and capital gains tax)
6. Select Investeringsforeninger og investeringsselskaber (ikke A/S eller ApS) (Investment funds and investment companies (not A/S or ApS)
7. Write your message and select Send.

In addition to submitting information on minimum income etc., annually, the distributing investment fund must report on the investor’s holdings, dividends received and purchases and sales.

On reporting, you must state that the distributing investment fund is subject to annual minimum dividend distribution. Your registration certificate will show whether it's registered as share-based or bond-based.

When you submit information concerning an investor, you must state whether this concerns:

1. a share-based investment company that is registered on the Tax Agency's list of share-based investment companies.
2. another investment company that is not registered on the Tax Agency's list of share-based investment companies.
3. a solely bond-based investment company with investments solely in bonds etc.

Purchases and sales, as well as holdings as of 31 December, must be reported annually. If dividends are distributed to investors, reporting must take place on an ongoing basis.

Please note that different rules apply to who is to report if the shares are held in a custody account with a bank or registered with a central securities depository.

You can read more about investment companies' reporting in the reporting guidelines on the page Beviser og aktier i investeringsforeninger og selskaber (IFPA (Certificates and shares in investment funds and companies (IFPA)).

If you have any questions about distributing investment funds with annual minimum dividend distribution, you can send them via  E-tax for businesses:

1. Log on to E-tax for businesses
2. Select Contact
3. Select Write to us
4. Select Companies, funds and associations
5. Select Aktier, anparter, udbytte-, royalty-, rente- og kursgevinstskat (Shares, units, dividend, royalty, interest and capital gains tax)
6. Select Investeringsforeninger og investeringsselskaber (ikke A/S eller ApS) (Investment funds and investment companies (not A/S or ApS)
7. Write your message and select Send.

The rules on the subjective tax liability of distributing investment funds subject to annual minimum dividend distribution are set out in section 1(1) para (5 c) of the Danish Corporation Tax Act.

The rules on the submission of information etc., are set out in section 16 C of the Danish Tax Assessment Act  and sections 21-22 of the Danish Act on Taxation of Capital Gains.

The rules on the date of change of status are found in section 5 F of the Corporation Tax Act.

Executive Order no. 1003 of 9 August 2013 on the duty of disclosure and documentation for collective investment undertakings subject to minimum taxation stipulates in more detail which information is to be submitted in accordance with section 16 C(10) of the Tax Assessment Act.