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Supreme Court of Denmark

Labour market contribution did not constitute a tax 
20-02-2014 

Case no. 130/2012
 

Judgment delivered on 20 February 2014


A
vs.
The Danish Ministry of Taxation


In 2007, the labour market contribution did not constitute a tax according to the Double Taxation Treaty between Denmark and Austria

The issue in this case was whether the Danish labour market contribution was covered by the tax concept in the Double Taxation Treaty between Denmark and Austria in 2007 with the effect that Denmark was precluded from collecting the contribution.

The Supreme Court held that the legislator had clearly meant for the labour market contribution to constitute a social contribution up to 2008 and not a tax. At the same time, according to the legislation in force in 2007, there was a direct connection between the labour market contributions and the specific social benefits etc. that the contributions were meant to finance, for which reason the labour market contribution was not covered by the tax concept in the Double Taxation Treaty with Austria.

The High Court had reached the same conclusion.

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