13 / 05 / 2022
Do you own a residential / leisure property, boat, plane or helicopter through a company?
A consultation note from the Ministry of Finance proposes a significant tightening of the tax law regulations.
The proposal means that if you as a personal owner have:
- Controlling influence (alone or together with related parties during the income year has directly or indirectly owned or controlled at least 50%) in a limited liability company, partnership or similar foreign company, and
- the company owns or disposes of residential property, leisure property, boat, aircraft, helicopter, which is suitable for private use,
you are considered to have the right to dispose of the property throughout the year. Holiday property that is considered a business cabin is proposed to be excluded.
The consequence of this is that a standard tax advantage is determined for both the owner and the company. The advantage is proposed to be set high, so that the rule achieves its purpose of preventing / stopping ownership in companies for private consumption.
The benefit for residential and leisure property is proposed to be determined as follows:
- 0.5% per week (26% per year) of the highest amount of turnover value or acquisition cost plus costs.
The benefit for boat, plane, and helicopter is proposed to be determined as follows:
- 2% (104% per annum) per week of acquisition cost plus expenses.
In the case of paid rent, the standard benefit is proposed to be reduced by krone for krone. Periods in which the owner can document that the property object has been used for the company's income-generating activity are not included.
Special rules are also proposed where the company transfers the above-mentioned assets to the owner or the owner's close relatives. The difference between the sales consideration and the higher of the value of turnover value for the property object, or the acquisition cost plus costs and costs for refurbishment / adaptation, is proposed to be treated as dividend for the owner and withdrawal for the company.
Dividends are taxed at 35.2% and withholding tax for the company amounts to 22%.
The Ministry proposes that the changes take effect from the income year 2023. Relevant owners should consider changes in ownership before the regulations enter into force. The consultation deadline is set for 1 August 2022.