Deferred inventory refers to assets for which tax payment has been deferred. This means that payment of tax on a specific portfolio – for example a share portfolio – has been postponed to a later point in time.

Deferred inventory is particularly relevant when you move from Denmark and are subject to exit tax on shares and other securities.

A deferred inventory arises if you move from Denmark and obtain a deferral (postponed payment) of your exit tax on assets such as shares and securities.

You can choose to pay the exit tax immediately or to establish a deferred inventory consisting of the assets covered by the deferral scheme. The deferred inventory is therefore the list of assets for which tax has been calculated, but where payment has been postponed.

Anyone who has a positive deferred balance must submit both a tax return (oplysningsskema) and an inventory statement to the Danish Tax Agency every year.

This obligation applies until the deferred balance has been reduced to zero. The requirement also applies if you move back to Denmark but still own assets that are part of the deferred inventory.

The deferred inventory includes the assets you owned at the time of departure from Denmark and that are covered by the deferral scheme, typically:

• Shares
• Investment fund units
• Other securities and financial instruments

If changes occur later (for example sales, dividends or other disposals), they must be registered before the deadline for the annual tax return.

The deferred balance changes when something happens to the assets in the deferred inventory, for example:

• Sale of assets, where part of the deferred tax will fall due for payment
• Dividends or other distributions that affect the tax position
• In some situations, value decreases that can reduce the deferred balance

The balance can never become negative. When it reaches zero, the obligation to submit inventory statements ceases.

If you sell assets or receive dividends from shares in the deferred inventory, any amount that becomes payable is due on 1 September of the year following the event.

It is therefore important to keep track of both transactions and deadlines to avoid interest and surcharges.

No, this is not possible. When the deferred balance has been fully settled and has reached zero, the obligation to submit a tax return and inventory statement ceases, and the deferral scheme is effectively terminated.

If you move back to Denmark and still own assets, the deferral scheme is terminated. Instead, the market value of the assets is reduced.

The reduction is made by the lower of the gain that formed the basis for the exit tax at the time of departure and the actual value change in the period. This is to avoid double taxation on the same gain.

To be covered by the deferral scheme on departure from Denmark, the following conditions must typically be met:

• You are subject to exit tax on shares and other securities when leaving Denmark.
• You apply for deferral of payment of the exit tax.
• You provide any required security, depending on your new country of residence.
• You comply with the ongoing reporting obligations (tax return and inventory statement).

A deferred inventory can involve significant amounts and has a direct impact on your liquidity. Incorrect or missing reporting can lead to immediate payment of the deferred tax, interest, surcharges and risk of double taxation.

At SkatteInform we can help you assess whether a deferral scheme is appropriate, establish and maintain the deferred inventory, handle the annual reporting to the Danish Tax Agency and plan transactions to avoid unnecessary tax costs.