New program for securities in SKAT's keystroke system

Calculations of stock gains and share losses are done automatically through a program

SKAT has prepared a program with the aim that the calculation of share gains and share losses in the future can be done automatically. However, there are limitations in the program that you should be aware of, just as not all information can be typed yet.

1. What can the program be used for?

1.1 Voluntary automatic calculation

If SKAT receives your information about the time of acquisition and the acquisition amount of your securities admitted to a regulated market, SKAT will be able to automatically calculate your share gain or share loss from the income year 2010.

From January 1, 2010 onwards, all information regarding both purchases and sales will be reported from banks and other securities dealers. Therefore, only information on securities held at 31 December 2009 must be entered into SKAT's programme.

1.2 Assurance of loss deductions

In addition, the program can be used to inform SKAT about acquisition amounts for securities admitted to a regulated market, but which not traded through a Danish securities dealer. If this information is not entered, you will not be able to obtain a loss deduction in the event of a loss on surrender.

However, if the security appears in your inventory in the tax file as of December 31, 2009, you will be able to obtain deductions. On the other hand, the program will not be able to calculate any loss or gain for the security, since in that case SKAT does not have information on the acquisition amount and the time of acquisition.

2. When and what can you type?

Already now, the program has been opened for entering information on the securities that appeared on the inventory in the tax file as of December 31, 2009. Please note that the program only covers shares admitted to a regulated market.

You cannot enter information about purchases and sales for the income year 2010, as this is done automatically, nor do you need to enter information about securities in the pension depository.

It will not be possible to enter information about securities that have not been traded through a Danish securities dealer until March 2011. It is therefore important to keep an eye on when this can happen, since for citizens with ordinary tax returns there is an obligation to report the information before May 1, 2011 in order to avoid losing the right to any loss deduction. For people with extended tax returns, the deadline is July 1, 2011.

3. Documentation

Despite the fact that you have disclosed to SKAT the acquisition amounts, etc., you are still obliged to keep documentation of the purchases as well as documentation of any special events in the companies in which you have invested, such as merger, reduction of capital or change of unit size.

If you do not have the documentation, you should try to obtain it from the securities dealer with whom you have traded the securities in due course.

4. How do I report?

You can access to report by logging into SKAT's keychain system, where the securities program is located.

5. SkatteInform's comments

SkatteInform believes that it is sensible and appropriate that SKAT has created the programme, as many citizens have difficulties with the correct calculation of share income. However, it is time-consuming for citizens to have to enter all the information before the automatic calculation can be applied. In the longer term, however, it should be possible to facilitate some of the work, as automatic calculation can occur.

SKAT informs that for the income year 2010 there is a high probability of errors in the calculations. For example, SKAT will automatically calculate the advance for shares bought and sold in 2010. If the purchase and sale of shares in the same company in which the person already held shares before 2010, and the acquisition amount for these is not disclosed, the calculation from SKAT will be incorrect.

SKAT further states that it is not possible to view the calculation until your annual statement is formed. Therefore, for individuals with extended tax returns, it will not be possible to view SKAT's self-declared statement. These persons must therefore calculate their own profits or losses. Alternatively, before the tax return deadline of July 1, 2011, they may report other income information. After this, an annual statement will be formed, in which SKAT's calculation will appear if purchase information has been reported. If you then disagree with the inventory, you can get a so-called digital retake, and change the stock statement.

Overall, therefore, we must conclude that the statement from SKAT is likely to be erroneous, which is why you should pay attention to whether the statement is correct.

It is you as a citizen, who is the tax return debtor and thus has ultimate responsibility for the accuracy of the information reported.

We therefore recommend that you or your auditor check annually whether the information reported by the banks, securities dealers, etc. reported is correct. Including the type of securities, heading, amount, date, etc. and also checks SKAT's inventory.

6. Contact SkatteInform

We provide qualified answers to your tax questions. If you are interested, we will be happy to assist you with the application of the new system upon further agreement.

Call us by phone 33 32 10 10

Send an email at info@skatteinform.dk

or visit us at www.SkatteInform.com

SkatteInform Chartered Accountants

Vester Voldgade 9, 2nd

1552 Copenhagen V

We do not accept responsibility for any dispositions that may be made on the basis of this newsletter without prior individual advice. Likewise, we accept no responsibility for any errors and omissions.

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