VP supports the share savings account from day one
Yesterday, The Danish Parliament (Folketinget) passed an Act giving Danes a new tax-privileged investment opportunity (Aktiesparekonto, or share savings account) as from 1 January 2019
VP Securities has already supported the new scheme by introducing a new securities account type, to be used by market participants for financial products under the new Act. The aim of the new share savings account is to fuel the investment culture in Denmark by giving tax allowances for investments in listed shares and listed equity-based investment funds. If a bank wishes to offer its customers this savings opportunity, there are implications for reporting to the tax authorities.
“Normally, you would expect at least six months from final adoption to the actual implementation of an Act, but in this case, market participants have one month from the Act’s adoption until it enters into force on 1 January,” says Product Manager Rasmus Hansen from VP. “We’ve proactively sought to support our customers with a system on which new products under this legislation can be used. VP will be ready to support the share savings account with a new account type, as well as tax reporting of dividends and holdings.”
Denmark is clearly taking inspiration from a more vital private investment culture in Sweden, and the share savings account is a first step in giving Danes stronger incentives to invest in shares and equity-based investment funds. By favouring investments of up to DKK 50,000 with lower taxes, it is hoped that we will see an increase in direct investments as an integrated element of overall savings.
“Our hope is to make it easier for market participants to develop and launch products on the basis of this new legislation. VP’s offering takes care of the monthly reporting of dividend from the investments, and also automatically notifies the tax authorities of the investor’s account balance as at 31 December. By ensuring tax reporting, we take one major factor out of the equation, but nevertheless our customers will still have a lot of work ahead of them in order to be able to support a rather complex product by 1 January,” says Rasmus Hansen.
VP plans a community test with customers during December. The aim is for market participants to test the new securities account type before the launch in the new year.