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December 7, 2023

Denmark passes Pillar Two

On 7 December 2023, the Danish Parliament passed Bill No. L 5 implementing Pillar Two into Danish law.

The global minimum tax rules are incorporated into a new law, the Minimum Taxation Act (Minimumsbeskatningsloven). The law closely follows the structure of Council Directive (EU) 2022/2523 of 14 December 2022 and includes clarifications and interpretations published by the OECD in 2022 and 2023. Among other things, taxpayers can elect to apply a temporary safe harbor based on country-by-country reporting. The law also introduces a qualified domestic minimum top-up tax.

The Income Inclusion Rule (IIR) is applicable for financial years beginning on 31 December 2023 or thereafter, whereas the Undertaxed Payment Rule (UTPR) is applicable for financial years beginning on 31 December 2024 or thereafter. However, the UTPR is applicable from 31 December 2023 in relation to a low-tax constituent entity that is resident in a country that has elected to not to apply the IIR and the UTPR for six consecutive fiscal years beginning from 31 December 2023.


For additional information with respect to this Alert, please contact the following:

EY Denmark, Copenhagen

EY Denmark, Aarhus

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


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