Guide to m&a tax 2022

b. Purchase Price allocation
Purchase price allocation is necessary in connection an acquisition of assets.
When selling depreciable assets and real estate in general, Danish law requires a distribution of the purchase price on the individual assets. The agreed allocation 
serves as the basis for capital gains taxation of the seller and as the depreciation basis/acquisition price for the buyer.
The Danish Tax Authorities may challenge either the total cash value or the allocation between the depreciable assets. Where no allocation is made, the tax authorities 
may assess an appropriate allocation and both the seller and buyer are obliged to apply the assessed values.
In a transaction between independent parties, the DTA will generally accept the allocation agreed between the parties in relation to both the buyer and seller’s tax, but 
it is not required to do so.
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Denmark
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TAXAND GLOBAL GUIDE TO M&A TAX 2022
c. Tax attributes
Tax losses of the target are not transferred to the buyer in an asset acquisition. They remain with the company or are normally used at the time of the transaction.
d. Tax Free reorganisations
It is possible to complete tax exempt demergers of assets and contributions in form of assets. See further detail under section 3.d.
e. Purchase agreement
The description of the purchased assets in an asset acquisition is generally more difficult than in share acquisitions. Therefore, in general, where a business is 
transferred by way of an asset deal, the following items is recommended to be included in a purchase agreement:
• 
A precise description of the overall business transferred;
• 
A specific description of the assets and liabilities that the business consists of, and which of these are included in the purchase. A practical solution when 
transferring a larger business is to only list the assets that are not transferred. This may be combined with a ‘going concern’ guarantee for the buyer, whereby the 
buyer is guaranteed to have all the assets necessary to continue the operation of the acquired business area;
• 
If the buyer assumes debts or other obligations, this should be specified;
• 
A description of how the assets and liabilities are intended to be transferred to the buyer;
• 
A provision as to when the buyer must incur expenses and receive income from the business (usually the acquisition date).
Additionally, the purchase agreement should carefully consider the purchase price allocation to each individual asset, as the depreciation profile for the various 
categories varies. A balance sheet/transfer sheet is therefore recommended.
As for assets with varying values (e.g. inventories, receivables and other), the agreement would normally include a principle for calculating their actual value on the 
acquisition date.