AT1 tax crackdown to spread to Denmark amid state aid fears

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By Tyler Davies
21 May 2019

Denmark is likely to become the next European member state to scrap its policy of allowing the interest payments on deeply subordinated capital instruments to be tax deductible. The move comes after the European Commission voiced its concern that the practice could constitute a breach of state aid rules.

Danish lawmakers have tabled a proposal for a new piece of legislation that would stop banks from being allowed to deduct tax from the interest paid out on additional tier one (AT1) instruments.

The draft legislation also covers the restricted tier one (RT1) securities issued by insurance companies, ...

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