Proposed anti-abuse rule on taxation of convertible bonds

On 15 April 2008, the Minister of Taxation presented a bill (L 181) to the parliament, introducing a new anti-abuse rule regarding the tax treatment of convertible bonds. Under Sec. 1 of the Danish Act on Taxation of Capital Gains on Sale of Shares, convertible bonds are taxed as shares. Thus, a possible gain on convertible bonds will not be taxed if the bonds are held by a company for at least 3 years. If the bonds are not converted into shares, but redeemed at maturity, the re…