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Supreme Court of Denmark

Child benefits disbursed in accordance with the Norwegian National Insurance Act taxable in Denmark 

Case no. 118/2007
Judgment 12 August 2008
EEA Agreement, article 4

The Danish Ministry of Taxation

In 1991, A, a Norwegian citizen, moved from Norway to Denmark with her husband at that time and their children. In the 2000 income year, A received various retirement benefits as well as monthly child benefits for non-biological children from the National Office for Social Insurance Abroad in Norway. The pension and the child benefits were tax-exempt in Norway. In the 2000 income year, A did not fulfil the basic conditions for tax exemption for child benefits under the Danish rules in the Act on Child Benefits.

The Tax Board of Appeal regarded A as being liable to pay tax on the child benefits in Denmark. A submitted that the child benefits were tax-exempt according to the then current provision in S. 7(p) of the Danish Tax Assessment Act on tax exemption for child benefits, and, if this was not the case, that the Danish tax rules discriminated against her in contravention of the discrimination prohibition in, for example, Article 4 of the EEA Agreement.

The Supreme Court ruled that the child benefits were not tax-exempt but taxable in Denmark as foreign income in accordance with the general rule in S. 4 of the Danish State Tax Act, and that the rules were not in contravention of the prohibition on discrimination, as A was not in a more unfavourable position than a Danish citizen in a similar situation as regards cohabitation and receipt of child benefits.

The High Court had reached the same conclusion as the Supreme Court.


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