Share-based investment companies
A share-based investment company is an investment company that has notified the Danish Customs and Tax Administration that the investment company is share-based.
Moreover, at least 50% of the company’s assets during each calendar year must on average be placed in securities etc. that are subject to the Danish Capital Gains Tax Act, except for shares etc. subject to section 19 C and investment units subject to section 22, and that the remainder of the assets are placed exclusively in securities etc.
If you meet the requirements, you must submit information every year before 1 July so that we can assess whether you comply with the investment limit, as described above. If the investment company no longer meets the conditions, you must deregister as a share-based investment company.
To obtain the status of a share-based investment company, you have to notify us by no later than 1 November of the calendar year preceding the calendar year from which the notification is to apply.
However, newly established investment companies can already opt for the status of share-based investment company from the calendar year in which the investment company was established. This requires that the following conditions are fulfilled:
- The option must be chosen at the same time as the establishment of the investment company.
- We need to have the notification of the investment company’s status no later than two months after the establishment of the investment company. However, no later than 1 November in the year of establishment.
Example:
A newly established company established on 5 January 2023 must submit a notification to the Customs and Tax Administration by no later than 5 March 2023 in order to obtain the status of share-based investment company in 2023.
If you submit the notification after 5 March 2023, the company’s status as a share-based investment company will not apply until as from 1 January 2024.
You can submit notification of the investment company’s status via form 05.038: Share-based investment companies.
You can find a list of investment companies with the status of share-based investment companies in current and previous years in Danish on the page Beviser og aktier i investeringsforeninger og selskaber (Certificates and shares in investment funds and companies).
No later than 1 July each year, the investment company must submit information to the Customs and Tax Administration to assess whether the investment limit has been fulfilled.
Fulfilment of the investment limit also requires that at least 50% of the company’s assets during each calendar year are on average placed in securities etc. subject to this Act, except for shares etc. subject to section 19 C and investment units subject to section 22, and that the remainder of the assets are placed exclusively in securities etc.
Please note that if the information is not submitted in due time, the investment company will be deemed to have changed its tax status to a bond-based investment company.
Submit the information via form 05.038: Share-based investment companies.
See list of information to be submitted
- The most recent financial statements
- Statement of the distribution of the assets showing that the investment limit is fulfilled
- The investment limit must be assessed on the basis of an average calculated over the calendar year. For example, you can choose measurement per calendar day, once a month or once a quarter. The calculation must be made on the basis of a minimum of four measurement points, which must be evenly distributed throughout the year. The company may not change the calculation method without permission from the Customs and Tax Administration
- You must take account of major portfolio changes when choosing the number of measurement points
- It is recommended that the closer the company’s assets are to the limit, the more measurement points should be used
- An account of how the calculation of the distribution of the assets has been made
It should be clear according to which principles the assets have been calculated. The account should include the following, although the list is not exhaustive:
- Selecting measurement points
- Calculation of the share element, which can be made according to the following points:
- Statement of the assets (carrying amount)
- The necessary corrections to calculate the "taxable assets"
- Division of assets into those included and not included as equities, respectively
- Calculation of the percentage (distribution of the assets)
- Which portfolios the calculation is based on
- How assets in the portfolio are classified, as well as whether and how they are included
- Whether equities lent out by the fund at a measurement date are included in the calculation of assts/shares, etc.
You can change name, contact person or similar in previously submitted information. However, in order to be valid in the current calendar year, the correction must be made by no later than 1 November of the year in question.
You can notify the change via form 05.038: Share-based investment companies.
If you no longer meet the conditions for a share-based investment company, or if the company ceases to exist, you must deregister. Deregistration can take place for the next calendar year.
Deregister the investment company via form 05.038: Share-based investment companies.
In addition to submitting information annually to assess whether the investment limit is fulfilled, share-based investment companies must also report on the company’s holdings, distribution of dividends, and purchases and sales.
On reporting, you must state that this concerns an investment company. Your registration certificate will show if the investment company is registered as share-based or bond-based.
When you report information concerning an investor, you must state whether this concerns:
- A share-based investment company that is registered on our list of share-based investment companies.
- Another investment company that is not registered on our list of share-based investment companies.
- A solely bond-based investment company with investments solely in bonds etc.
Purchases and sales and holdings as of 31 December, must be reported annually. If dividends are distributed to investors, you have to report such information regularly.
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 share-based investment companies, please email us at ABIS@sktst.dk.
The rules on the subjective tax liability of investment companies are set out in section 3(1) para (19) of the Danish Corporation Tax Act.
The rules on share-based investment companies are set out in section 19 B of the Danish Capital Gains Tax Act.
The rules on the submission of notifications and information in accordance with section 19 B(4) and (6) of the Capital Gains Tax Act are set out in Executive Order no. 1173 of 10 August 2022.
The rules on redistribution to investors are found in section 65 of the Danish Withholding Tax Act.
For further legal information in Danish see our legal guide .