Draft bill proposing recharacterization of shareholder loans

On 14 August 2012, the government published a draft bill (L 199) on taxation of shareholder loans (the Draft Bill). Danish company law generally forbids a company from issuing loans to its shareholders and members of its management. There has, however, been speculation in the media that such loans have been issued for a long time without any negative consequences. Consequently, the government tries to counteract such loan arrangements by the Draft Bill. The main proposals in the Draft Bill…