The European Commission has formally requested Denmark to amend its rules which apply an exit tax on shares held by individuals when leaving the country. The Commission considers that the Danish tax rules go beyond what is needed to prevent tax evasion and breach the free movement of people and capital set out in the Treaties.

According to the Commission's press release, Denmark applies tax on the gain made by an individual on his/her portfolio of shares when the individual leaves the country to take up residency elsewhere in the EU. This tax is collected from the individual either when the shares from his/her portfolio are sold, or when he/she receives dividends or other types of income from these shares.

The Commission has requested Denmark to change its legislation within two months to bring it in line with EU law. Failing this, the European Commission may refer the case to the EU's Court of Justice.