High Court case between Taks and Varðin begins

In October, the Faroese Court ruled that Varðin shareholders were not required to pay tax for the first DKK 887 million if the company were to be sold.

Tax authority Taks later appealed this decision to the High Court in Denmark.

According to the capital gains law, the tax percentage is 35, which means tax bill of DKK 310 million in this case.

The dispute between Taks and Varðin began many years ago. Taks lost the court proceedings at the time, both in the Faroese Court and in the High Court. However, the Supreme Court upheld Taks’ appeal.

The Supreme Court ruled in 2015 that when Varðin’s shareholders sold shares to their own holding company with profits of DKK 152m, this was an instance of hidden distribution of profits.

The case has been ongoing since then, and the High Court proceedings began this morning.