Press Release: Direct taxation: Commission requests Denmark to change tax measures which discriminate income from foreign based investment funds

The European Commission formally requested Denmark to change its tax provisions according to which income from investment funds is taxed at a preferential rate if the latter fulfils detailed requirements that are very difficult or impossible for foreign based investment funds to fulfil. The Commission considered the provisions incompatible with the freedom to provide services and the free movement of capital as guaranteed by Articles 49 and 56 of the EC Treaty and Articles 36 and 40 of the EEA Agreement. The request took the form of a reasoned opinion (second step of the infringement procedure provided for in Article 226 of the EC Treaty). If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the European Court of Justice.