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11 June 2026

Denmark Supreme Court rules nonresident taxpayers had five years, not three, to reclaim withholding tax

  • On 11 June 2026, the Danish Supreme Court ruled that the statute of limitations for nonresident taxpayers' claims for refunds of Danish withholding tax is five years, rejecting the tax authorities' position that a three-year period applied.
  • The Court confirmed, based on legislative history, that section 67 A of the Withholding Tax Act applies both to claims by the tax authorities and claims by taxpayers, overturning an interpretation of the law that the authorities had introduced in June 2016.
  • The ruling applies to refund claims for dividend, interest and royalty withholding tax and establishes a five-year limitation period for such claims by nonresident taxpayers.
  • Based on the decision, nonresident taxpayers may now pursue refund claims back to June 2021, and similar pending cases that had been stayed may proceed in line with the ruling.
 

Executive summary

The Danish Supreme Court has ruled that the statute of limitations for a nonresident taxpayer's claim for refund of withholding tax (WHT) is five years, not three years as argued by the tax authorities. Following the ruling, pending cases that have been stayed awaiting the Supreme Court's opinion can now proceed and be decided in line with the outcome of the new ruling.

Supreme Court

The case concerned three nonresident taxpayers that filed claims in 2017 requesting a refund of Danish WHT applied to dividend and royalty payments based on the applicable tax treaty rates. The taxpayers argued that the claims were timely made under the special five-year statute of limitations in section 67 A of the Withholding Tax Act. This position was in line with administrative practice until 13 June 2016, when the tax authorities officially changed their interpretation of section 67 A. The tax authorities denied the refund claims, arguing that section 67 A only applied to the tax authorities' claims against taxpayers and that the general three-year statute of limitations thus applied in this case. This position was in line with the change of practice introduced in 2016.

The taxpayers prevailed at the National Tax Tribunal and the Eastern High Court. The tax authorities then filed an appeal with the Supreme Court.

In its ruling of 11 June 2026, the Supreme Court upheld the decision of the high court stating that the wording of section 67 A was ambiguous, but that the legislative history to the provision indicated that it was also applicable to a taxpayer's WHT claim against the tax authorities.

Implications

The Supreme Court's ruling means that the statute of limitations for a nonresident taxpayer's claim for a refund of Danish WHT is five years. The ruling is applicable to dividend, interest and royalty WHT.

Similar pending WHT cases may now proceed and be decided in line with the outcome of the Supreme Court's ruling.

Based on the Court's ruling, it should be possible for nonresident taxpayers to reclaim excess Danish WHT paid from June 2021 onward. It remains to be seen whether the tax authorities will issue a practice notice allowing nonresident taxpayers to file WHT claims all the way back to 13 June 2016.

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Contact Information

For additional information concerning this Alert, please contact:

EY Denmark, Copenhagen

EY Denmark, Aarhus

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

Document ID: 2026-1259

 
 

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