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Denmark releases draft bill to implement OECD’s MLI for public comment

On 3 December 2018, the Danish Minister of Taxation released for public hearing a draft bill that will implement in Danish law the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI was signed by Denmark on 7 June 2017.

According to the draft bill, Denmark will implement all elements of the MLI without any reservations. However, Denmark intends to narrow the scope of the provision on Arbitration to specific cases, see below. The specific elections that Denmark intends to make are outlined in the table.


MLI Article

Article 5

Elimination of double taxation in case where a financial instrument may give rise to a “deduction without inclusion”

Article 5 (6), Option C

Article 7(7)

Prevention of treaty abuse

Article 7(7), Option A

Article 9(3)

Capital gains from alienation of shares of interests of entities deriving their value principally from immovable property

Article 9(4)

Article 13(1)

Artificial avoidance of permanent establishment status through the specific activity exemptions

Article 13(2), Option A

Article 17(3)

Corresponding adjustments

Article 17(3), Option A

Article 18


Part VI applies

Article 23(3)

Type of arbitration process

Article 23(3), reservation made

Article 23(7)

Type of arbitration process

Article 23(7), reservation made

Article 24(1)

Agreement on a different resolution

Article 24(2) applies

Article 28(2)


Article 28(2)(a)

  • Arbitration is not applicable to tax treaties between Denmark and other EU Member States
  • Arbitration is only applicable to tax treaties to the extent that the other party accepts that:
    • the Chair of the Arbitration Panel must be a judge; and
    • Denmark may publish a resume of the decision of the panel; and
  • Arbitration is not applicable in cases where a party has sanctioned an individual or company for tax evasion, intentional negligence, or gross negligence

Article 35(3)

Entry into force

Article 35(3) applies


Following the hearing, a final bill will be presented to Parliament at the beginning of 2019 and the bill is expected to be enacted before summer 2019.

 EYG no. 012049-18Gbl

Download this Tax Alert as a PDF file.


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