The Danish tax authority, SKAT, has changed its practice regarding time-barring of claims for refunds of dividend tax withheld. This means that claims for refunds of dividend tax withheld will be regarded as time-barred after three years.
According to SKAT’s former practice the limitation period for claims for refunds of dividend tax withheld was five years. In a case regarding refunds of dividend tax withheld, however, SKAT has changed the interpretation of the relevant sections in the Danish Tax at Source Act.
According to the new interpretation the Danish tax at Source Act does not apply to the determination of the period of limitation for claims for refunds of dividend tax withheld. This means that claims for refunds of dividend tax withheld are time-barred after three years consistent with the Danish Limitations Act.
It should be noted that this does not apply, if another period of limitation applies under a double tax agreement.
When will the practice come into force?
The new limitation period is stated in SKATs guidance note, SKM2016.263.SKAT, according to which the change will take effect three months after publication of the guidance note.
The guidance note was published on 13 June 2016.
This means that claims for refunds of dividend tax withheld will be regarded as time-barred after five years, if the request for a refund is received by SKAT no later than three months after publication of the guidance note, i.e. on 13 September 2016.
Do you want to know more?
If you want to read more about refund of dividend tax withheld, the translated version of the guidance note can be found here. It should be noted that only the Danish text has legal validity.
If you have any other questions, please contact attorney at law Robert Mikelsons by e-mail [email protected] or by telephone (+45) 77 40 10 30.