Legal & Tax — frequently asked.
Practical answers to the questions we hear most often about Danish tax, company law, contract law, and the international dimensions of each.
By Moore Law · CVR 43 57 76 70.
What kind of tax matters does Moore Law handle?
The full range of Danish and international tax matters — including representation before the Danish Tax Agency, the Tax Appeals Board (Skatteankestyrelsen), and the National Tax Court (Landsskatteretten); tax residency and exit-tax planning; binding-ruling requests; international taxation and cross-border tax planning; and the tax dimensions of commercial transactions including M&A, joint ventures, and restructurings. The practice does not handle routine VAT compliance or annual personal tax-return preparation; those are best served by firms specialising in compliance work.
How long does a Danish tax appeal typically take?
Timelines vary significantly by stage and complexity. Dialogue with the Tax Agency at the initial stage typically resolves within three to nine months for matters that conclude at that level. Formal appeal to Skatteankestyrelsen generally runs six to eighteen months. Appeal to Landsskatteretten typically runs twelve to thirty months from filing to decision. Onward appeals to the ordinary courts extend the timeline considerably. The Danish cost-recovery framework operates throughout, which materially affects the economics of pursuing meritorious appeals.
What is the 50% cost-recovery framework?
The Danish Tax Administration Act provides that taxpayers who appeal a Tax Agency decision are entitled to reimbursement of at least 50% of their reasonable legal costs in the appeal and litigation proceedings — regardless of the ultimate outcome on the merits. Where the appeal is successful in whole or in material part, reimbursement rises to 100%. The framework substantially reduces the economic deterrent to pursuing meritorious appeals, and it operates by application following the substantive decision.
When should I get a binding tax ruling?
A binding ruling is generally worth seeking before any transaction of substance where the Danish tax treatment is uncertain. Common triggers include cross-border restructurings, share dispositions, employee incentive arrangements, family-business transfers, significant cross-border income flows, and material questions about residency status. The cost of preparing and submitting a binding-ruling request is typically small compared to the cost of getting the underlying tax position wrong after commitment. The framing of the request is the most important part of the work.
What does cessation of full Danish tax liability actually mean?
It means the point at which a person stops being a full Danish tax resident — but it is decided on substance rather than on physical departure. The principal tests look at whether the person has a Danish home available, where the centre of vital interests sits, and whether residency has been genuinely established elsewhere. Documentation is decisive when the position is later examined. Cessation is generally a process rather than an event, and the timing depends on the actual facts rather than the date the person claims.
What is exit tax (fraflytterskat)?
The Danish exit-tax regime treats the cessation of full Danish tax liability as a constructive disposal, at fair market value, of certain assets — principally share holdings (above defined thresholds), share-based incentive arrangements, and certain pension positions. The resulting gain is taxed at Danish capital-gains rates. Deferral of payment is available on application, subject to the provision of security and to ongoing reporting obligations. Properly structured, the regime is manageable; ignored, it produces avoidable problems.
Can foreigners form a Danish company?
Yes. Danish company law is straightforward in its treatment of international shareholders. Most international founders establish a Danish ApS (private limited company), with capital, share-class arrangements, and management structure designed to fit the underlying commercial purpose. Formation including registration with Erhvervsstyrelsen and opening a Danish bank account typically takes two to four weeks. International ownership does not, by itself, complicate either formation or ongoing operation, though specific cross-border considerations may apply.
What is the typical timeline for a Danish M&A transaction?
Share-deal acquisitions of small to mid-market Danish companies typically run three to six months from initial engagement to closing — including due diligence, negotiation of the deal documents, drafting and execution, and any regulatory clearances. Larger or more complex transactions, particularly those involving cross-border elements, financing arrangements, or merger-control clearances, can run six to twelve months or longer. Carefully structured pre-deal positioning (sometimes including a binding ruling) often shortens the closing timeline by reducing late-stage surprises.
When should I choose arbitration over court litigation?
Arbitration is generally appropriate where confidentiality matters, where international enforceability is important (under the New York Convention), where the parties want a specialist tribunal familiar with commercial questions, or where the underlying contract requires it. Court litigation is generally appropriate where injunctive relief is needed, where the legal questions are novel and would benefit from public precedent, or where the underlying matter is purely domestic and time-sensitive. The choice should be made at the contract-drafting stage, not when the dispute has arisen.
Do you draft contracts from precedent or from scratch?
Both, depending on the matter. Routine commercial documents — standard distribution agreements, services contracts, confidentiality arrangements — sensibly adapt from well-tested precedent, with attention to the specific facts of the engagement. Transactions of substance, novel arrangements, and contracts that will govern long-term relationships generally warrant bespoke drafting. The price difference between adaptation and bespoke drafting is real but typically modest relative to what is at stake in the underlying transaction. The right approach depends on the matter, not on a general rule.