Interest and royalty tax refunds move to a five-year limitation period

Skattestyrelsen now applies a five-year limitation period to applications for refunds of Danish interest and royalty withholding tax, replacing its former three-year practiceSkat. The authority says it will automatically reopen relevant previously decided cases and expects all such cases to be reopened before the end of 2026. Applicants whose refusals fall within that reopening exercise do not need to initiate it themselves.

The notice identifies several categories of cases. These include claims concerning tax withheld after 11 June 2021 where a refund was refused, or only partly granted, because the claim was considered time-barred under the former three-year periodSkat. It also covers applications that remain undecided, and applications submitted within the five-year limitation period where Skattestyrelsen issued its decision after 11 June 2025. Another category concerns timely requests to reopen previously decided cases that were put on hold at the applicant’s request.

The cases will be assessed using the five-year limitation period and the ordinary reopening rules. Reopening therefore remains subject to those rules and to the claim not having become time-barred. The notice describes applications as needing to reach the authority within five years of the withholding, while its deadlines section also flags that a double-taxation agreement may contain special limitation rules.

The underlying Supreme Court judgment of 11 June 2026Domsdatabasen concerned refunds of dividend and royalty tax exceeding the final tax due, for example under a double-taxation agreement. The Court held that section 67 A of kildeskatteloven’s five-year period also covers those claims by persons with limited Danish tax liability. It found no legal basis for the tax authority’s 2016 change of practice and upheld the lower court’s judgment.

Skattestyrelsen’s current refund notice extends the operational guidance to interest and royalty tax. It continues to require applicants to document the refund conditions, including the withholding, the recipient’s income and tax residence, and the beneficial owner’s entitlement to relief. Representatives must attach a power of attorney.

The legal basis is kildeskatteloven section 67 A, as interpreted by Højesteret on 11 June 2026 in cases BS-36976/2025-HJR and BS-36974/2025-HJR, with Skattestyrelsen’s interest-and-royalty refund guidance explaining the reopening exercise.