D.1.6 Disclosure of information etc. in connection with transfers under Section 41 of PBL

Contents

This section describes Sections 3, 4 and 5 of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

The section covers

conditions for the transfer of pension plans under Section 41 of PBL
disclosure of information for statement
distribution under Section 30(2) and (3) of PBL
transfers from banks to pension providers
obligation to pay PAL tax and interest, if any

Conditions for the transfer of pension plans under Section 41 of PBL

Section 41 of PBL sets out the rules on tax-exempt transfers of a number of pension plans from one plan to another existing or newly established plan. Under Section 41 of PBL, the transfer of a whole plan or the partial transfer of a policy or pension plan or the like is not considered a disbursement or a contribution if the transfer takes place in accordance with the rules below. Thus, such transfers do not trigger tax liability or a right to deduct the amount transferred.

Tax-exempt transfers can take place in the following ways under Section 41 of PBL:

a. between pension plans providing a regular income,

b. from an annuity insurance plan or instalment savings plan for pension purposes to a pension plan providing a regular income, cf., however, Section 41(8) of PBL pertaining to Section 15 B of PBL,

c. from an annuity insurance plan or instalment savings plan for pension purposes to another annuity insurance plan or instalment savings plan for pension purposes which has been taken out after the commencement of the Act, cf., however, Section 41(8) of PBL, unless only one of the pension plans is covered by Section 15 A of PBL or the transfer takes place after the disbursement of the first instalment from one of the plans; however, a transfer can take place if a commenced disbursement programme under one of the plans can continue on the same terms,

d. from an endowment insurance plan or savings plan for pension purposes to a pension plan providing a regular income,

e. from an endowment insurance plan or savings plan for pension purposes to another endowment insurance plan or savings plan for pension purposes which has been established after the commencement of the Act,

f. from an endowment insurance plan or savings plan for pension purposes to an annuity insurance plan or instalment savings plan for pension purposes if the transfer takes place before the early retirement age is attained, cf. Section 74 of the Danish Unemployment Insurance Act (Lov om arbejdsløshedsforsikring etc.), cf., however, Section 41(8) of PBL,

g. between SP accounts, cf. Section 17 of the Danish Labour Market Supplementary Pension Fund (ATP) Act,

h. from an account with the Employees' Capital Pension Fund (LD), cf. Section 7 a of the Danish LD Pensions Act (Lov om Lønmodtagernes Dyrtidsfond), to an annuity insurance plan or instalment savings plan for pension purposes if the transfer takes place before the early retirement age is attained, cf. Section 74 of the Danish Unemployment Insurance Act, to an endowment insurance plan or savings plan for pension purposes which has been established after the commencement of the Act, to a pension plan providing a regular income or to an SP account pursuant to the Danish Labour Market Supplementary Pension Fund (ATP) Act,

i. from the part of a pension plan providing a regular income covered by Section 2, Item 4 or Section 7 of PBL which is made up of a supplementary one-off payment to an endowment insurance plan for pension purposes when the transfer takes place as part of a transfer of the pension commitments under Part 8 of the Danish Supervision of Company Pension Funds Act (Lov om tilsyn med firmapensionskasser) or as part of a portfolio transfer under Sections 233-235 of the Danish Financial Business Act (Lov om finansiel virksomhed), or

j. in other circumstances where the disbursement in connection with the transfer to a plan covered by Part 1 does not have tax consequences for the person in question.

Disclosure of information for statement

When a plan covered by Section 1(1) of PAL is transferred under Section 41 of PBL to another bank or pension provider, the ceding bank or pension provider must, at the time of the transfer, disclose information on the plan in order to enable the receiving bank or pension provider to submit statements under Sections 21-23 and 25 of PAL.

SKAT has prepared a form which can be used in connection with transfers under Section 41 of PBL. The form contains the minimum requirements for the information which must be disclosed.

See Section 3(1) of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Distribution under Section 30(2) and (3) of PBL

If a plan is distributed to a spouse in connection with the administration or separation of an estate under Section 30(2) and (3) of PBL, the bank or pension provider carries out a division in proportion to the agreed distribution. This is due to the fact that the distributed part is considered as originally established by the spouse. No termination tax is therefore to be levied under Section 23(1) of PAL.

SKAT has prepared a form which can be used in connection with transfers under Section 41 of PBL. The form contains the minimum requirements for the information which must be disclosed.

See Section 3(2) of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Transfers from banks to pension providers

If a plan is transferred under Section 41 of PBL during the year of taxation from a bank to a pension provider, the bank must submit

a statement for the part of the year of taxation which has elapsed and
for the year before the year of taxation if no statement has been submitted for this year of taxation.

Sections 23 and 25 of PAL on the determination of the basis of taxation etc. and on the deadline for submitting the statement and paying the PAL tax also apply.

See Section 4 of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Obligation to pay PAL tax and interest, if any

Banks and pension providers which, pursuant to the rules set out in

Sections 3 or 4 of the Order or
Sections 21-23 and 25 of PAL,

must submit statements must also pay PAL tax with interest, if any.

See Section 5(1), Item 1 of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Additional PAL tax

If a tax amount is changed, additional PAL tax with interest under PAL may have to be paid by the bank or pension provider with which the plan is placed at the time when the payment is to be made.

See Section 5(1), Item 2 of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Overpaid PAL tax

Overpaid tax amounts with interest can be refunded to the bank or pension provider which has submitted the statement. Section 26 of PAL applies similarly to the submission of statements under Sections 3 and 4 of the Order.

See Section 5(1), Items 1 and 4 of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

Receiving bank or pension provider liable to taxation

If the PAL tax is not paid in due time by the ceding bank or pension provider, the receiving bank or pension provider must pay PAL tax with interest if requested to do so by SKAT.

See Section 5(2) of Order no. 1540 of 13 December 2007 on the PAL rules on foreign banks and pension providers and on compensation disbursements.

See section D.1.3.1, Final calculation of the basis of taxation and the taxable part thereof as well as declaration and payment of PAL tax upon the termination of a pension plan, for information on the determination of the basis of taxation in connection with transfers under Section 41.