Detailed information from 12 income years; this is what companies are required to report to SKAT if they intend to apply their tax loss carryforwards.

It is vital that companies and other entities with tax loss carryforwards get a good grasp of their total losses at the earliest possible opportunity. It is often a time-consuming task demanding considerable resources to gather this information. At Bech-Bruun we strongly recommend that you set aside adequate resources in time to be able to gather and report the information to SKAT.

By 1 August 2015 at the latest, companies, foundations and other entities liable to pay tax subject to the Danish Corporation Tax Act (selskabsskatteloven) or the Danish Foundation Tax Act (fondsbeskatningsloven) must submit information about their unused tax loss carryforwards. If they fail to file correct information before this deadline, they forfeit their right to use these carryforwards.

What to report

According to the new rules, companies must submit a specification of unused tax loss carryforwards for the 2002-2013 income years for each relevant entity. The information must be broken down by income year and/or interim period for assessment purposes.

The companies are also required to report on tax-exempt restructurings that may have an impact on the application of the tax loss carryforwards. The reporting must specify, among other things: 

  • The nature of the tax-exempt restructuring
  • The tax effective date
  • The participating companies
  • The unused tax loss to be carried forward from the transferring company to the recipient company
  • The subsidiaries subject to joint taxation transferred from the transferring company or companies to the recipient company as a result of the tax-exempt restructuring.

The process of gathering all requisite information is quite laborious, particularly because of the requirement for a certain degree of detail to be met, the potential complexity of tax loss-issues when restructurings have been carried out during the period, and because the reporting must cover a period of 12 income years.

When to report 

Companies intending to apply their unused tax loss carryforwards in the income statement as from the 2014 income year must report the required details no later than 1 August 2015.  The company must be covered by the new rules governing the tax loss register.

Late reporting will generally mean that the right to apply the tax loss carryforwards will be forfeited. In special circumstances, SKAT may however grant a dispensation for such late reporting.

The reporting must be made in digital form to SKAT at its E-tax website (TastSelv SelskabsSkat). In the case of companies subject to joint taxation, the duty to report the requisite information for all group companies lies with the management company.