Denmark Tax Agency Clarifies Taxation of Loss Carryforwards Regarding Tax-Free Mergers Between Jointly Taxed Companies

The Danish Customs and Tax Administration March 4 posted Tax Council Binding Answer No. SKM2026.117.SR, clarifying the taxation of loss carryforwards regarding tax-free mergers between jointly taxed companies. The taxpayers, a transferring company and a receiving company, were jointly taxed during the years in which the transferring company’s losses arose, with joint taxation having been re-established at the time of the intended vertical merger. The taxpayers sought clarification on whether the transferring company’s unused tax losses could be carried forward and utilized by the receiving company after the tax-free merger. Upon review, the Tax Council found that: 1) losses arising ...