Guide to m&a tax 2022

d. Tax Free reorganisations
Generally, acquiring shares are covered by the rules on capital gains from the sale of shares meaning that gains are taxable, and losses are deductible for the seller. 
However, aside from commercial shares, the capital gains from the sale of own shares, group shares, subsidiary shares and from tax exempt portfolio shares are 
exempt from taxes.
Depending on the reorganisation framework and whether pre-approval from the Danish Tax Authorities is obtained, the conditions and impact of the reorganisation 
may vary (e.g. ability to carry forward tax losses, re-actualisation of tax liability on future sales, etc.). Additionally, anti-avoidance rules (including the Danish GAAR) 
may restrict the possibility for tax free reorganisations.
Types of tax neutral reorganisations (and the basic conditions):
i 
 Tax free merger:
• 
A merger may be tax free if all assets and liabilities of the company are transferred to the receiving company. The remuneration to the shareholders must consists 
of shares in the continuing company.
• 
A merger must take effect from the beginning of the receiving company’s fiscal year (may therefore become effective retroactively).
• 
Following a tax exempt merger, any tax losses from before the merger date may not be carried forward to the receiving company. However, in the event of 
mergers between jointly taxed companies, the losses incurred while the companies were jointly taxed may be deducted.
• 
A tax free merger must be reported to the Danish Tax Authorities and a final income statement from the terminated company must be submitted as well.
ii 
 Tax free demerger
• 
In a demerger, a company transfers part or all its assets and liabilities to one or more companies. The shareholder of the company will receive newly issued shares 
in the receiving company/companies and possibly a cash compensation amount.
• 
A demerger may be completed as either a demerger with termination, whereby the contributing company ceases to exist and at least two new companies arise, 
or as a branch demerger, where part or all the business of the contributing company is transferred to a new company. As for branch demergers, the assets and 
liabilities that are split into one or more receiving companies must each form a branch of the demerging company (also known as “the branch requirement”).
• 
The reorganisation may be carried out with or without the DTA’s permission, in the latter case a three year holding requirement apply, whereby the transferred 
shares may not be sold or otherwise divested within three years of the demerger.
• 
Additional conditions apply, including special rules for cross border demergers.
• 
The demerger must be registered through the DTA’s online self-service platform.
9 
Denmark
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TAXAND GLOBAL GUIDE TO M&A TAX 2022