Separate leasing contracts cannot be considered a single combined agreement and do not trigger tax consequences as one combined agreement

On 10 March 2021, the National Tax Tribunal ruled in a case on whether the fact that a lessee, when entering into a leasing agreement for a period of 12 months, simultaneously signed leasing contracts for subsequent periods 2 and 3, could mean that all three leasing contracts must be considered as one combined leasing agreement. If this were the case, the effect would be that registration tax would have to be paid for all three periods at the time of entering into the first leasing agreement. The National Tax Tribunal concluded that the leasing agreements could not be regarded as a single combined agreement, but that each leasing agreement had to be considered an independent agreement, meaning that the proportional registration tax must be calculated and paid upon each renewal of a leasing agreement.

Recalculation of registration tax

In 2019, Bachmann/Partners represented a case at the Eastern High Court concerning the recalculation of registration tax when a leased vehicle exits the proportional registration tax scheme. The case concerned the Danish Tax Agency’s self-imposed deadlines, legal interpretation, and statutory authority. Bachmann/Partners won the case at the Eastern High Court in December 2019. We have written an article about the judgment, which will be published in the upcoming issue of SR-Skat. The article can be read by clicking here.

Limitation of criminal liability

Bachmann/Partners Law Firm represented a majority shareholder in a case where the company in which the shareholder held shares had failed to file VAT returns. The public prosecutor charged the shareholder with VAT fraud. The failure to file VAT returns had existed for several years and the public prosecutor claimed a high fine due to this fact. Bachmann/Partners Law Firm acted as defense counsel in criminal proceedings against the shareholder and got the case settled with a fine that was significantly lower than the public prosecutor´s claim. The public prosecutor had missed that by reason of limitation on criminal proceedings several of the years were precluded.

Illegal Shareholder Loan

Bachmann/Partners Law Firm assisted a client in a case where the Danish Tax Authorities were of the opinion that an illegal shareholder loan had been established by trade between the company and the shareholder. However, Bachmann/Partners Law Firm presented evidence to the Authorities that led the Authorities to the conclusion that the trade between the shareholder and the company was on market terms.

Fine imposed for untimely transfer pricing documentation was reduced by half

The public prosecutor had claimed a fine of DKK 125,000 to a company for each income year that the company had not submitted its transfer pricing documentation to the Danish Tax Authorities on time. The district court found that the claimed fine each income year was not a proportionate fine. The court came to this conclusion despite the fact that it was specified in the drafting history of the law as being the legal position wanted by the law makers.

Lack of legal basis for a discretionary assessment of gift tax

Bachmann/Partners Law Firm represented a client in a case where the Danish Tax Authorities had made a discretionary assessment of gift tax.
The National Tax Tribunal rejected the ruling because there was no legal basis for such a discretionary assessment. The legal basis was introduced by law afterwards.

Auditor´s Professional Responsibility

Bachmann/Partners Law Firm assisted a majority shareholder in a case concerning auditor´s professional responsibility and liability. The Western High Court ruled that the audit firm had acted wrongfully by calculating an interim account between the shareholder and his company with an incorrect amount. This wrongfully calculation gave rise to an illegal shareholder loan that constituted as an taxable event.

Right to deferment

Bachmann/Partners Law Firm represented a client in a case where the Tax Authorities had denied the client the right to deferment. However, the National Tax Tribunal overruled the ruling from the Tax Authorities. The request was unjustifiably refused because the denial of the request was justified with circumstances that were to be adjudicated in the underlying appeal case of the tax assessment.

Bankruptcy quarantine

Bachmann/Partners Law Firm assisted a former manager in a bankruptcy quarantine case.

Excise duty on mineral oils

Bachmann/Partners Law Firm represented the European Commission in a preliminary ruling before the Court of Justice of the European Union concerning Directive 2003/96/EC (the Energy Taxation Directive). The case concerned consumption of energy products produced within the curtilage of an establishment producing energy products.
The Court of Justice of the European Union agreed with arguments that Bachmann/Partners Law Firm presented for the court.