DENMARK Law and Practice Contributed by: Simon Milthers, Thomas Bøgedal Kristiansen, Mikkel Friis Rossa and Emil Steenberg, Bech-Bruun
in the EU or in a country that has a double- tax treaty with Denmark; and • exception 4 – if a corporate shareholder who, at the time of the demerger, owns at least 10% of the shares or owns group shares in the transferring company receives cash as part of the spin-off (this rule applies only if the shareholder is eligible for tax-exempt divi- dends from these shares). The specific requirements for a tax-exempt demerger with permission are as follows. • The spin-off should be motivated by valid business objectives rather than tax evasion. The DTA conducts a detailed assessment of each transaction to verify its legitimacy. • The shareholders must be remunerated in the receiving company in the same proportions as they were in the transferring company. 5.3 Spin-Off Followed by a Business Combination A spin-off immediately followed by a business combination is technically possible in Denmark. However, it is not very common. 5.4 Timing and Tax Authority Ruling The timing for a spin-off in Denmark depends on whether it is executed as a tax-exempt demerger with or without permission from the DTA. The time needed to obtain a ruling from the DTA var- ies based on the transaction’s complexity and specifics. The DTA assesses each case individu- ally, leading to different processing times. Without DTA Permission If the spin-off meets certain conditions (eg, a three-year holding requirement and balance adjustment rule), it can proceed without DTA permission. This process is generally quicker,
influenced by legal registrations, audit valua- tions, and other preparatory steps. With DTA Permission If the spin-off does not meet the conditions for a tax-exempt demerger or involves complexities, a ruling from the DTA is required. This includes cases where tax evasion might be a concern, or shareholders are remunerated in cash. 6. Acquisitions of Public (Exchange-Listed) Technology Companies 6.1 Stakebuilding Stakebuilding In a mandatory offer, prior stakebuilding is a prerequisite – given that mandatory offers are triggered by the buyer having acquired a control- ling stake. In voluntary offers, prior stakebuilding is somewhat deal-specific and neither common nor uncommon. Reporting Threshold A buyer must notify the listed company and the Danish Financial Supervisory Authority (FSA) if the buyer’s direct or indirect stake in the listed company crosses any of the following thresh- olds: 5%, 10%, 20%, 25%, 33%, 50%, 66% or 90% of the voting rights or share capital of the company. Notification must generally be made no later than four business days after the buyer becomes aware that it has crossed a threshold. A buyer is normally presumed to have become aware of crossing a threshold no later than two business days after the transaction. The com- pany must announce the information provided to it in a major shareholder notification.
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