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Danish Tax Amnesty Scheme Introduced

26 Jul 2010

All parties in the Danish Parliament, except for the Social Democrats, have agreed to introduce a tax amnesty scheme in 2011 for taxpayers with assets in tax haven countries. The Minister of Taxation will also be given the authority to buy information from banks and other sources abroad. Taxand Denmark examines the Tax Amnesty Scheme and its main features.

Under the existing rules, taxpayers that turn themselves in often receive a fine levied at 50% of the avoided amount (i.e. a 50% discount on the fine). Therefore, the primary advantages of the amnesty scheme are the avoidance of imprisonment and guaranteed confidentiality, but penalties will be higher (60% of the evaded amount, which effectively means only a 40% discount).

Denmark, like a number of other countries, will now offer a short-term amnesty scheme. The scheme has the following features:

  • Guarantee of no prison term regardless of the amount involved
  • Resolution of the matter on a confidential basis without involving the courts
  • A fine of 60% of the evaded amount

Unpaid direct and indirect taxes on assets - tax, VAT, gift and estate taxes - must be paid regardless of the amnesty.

The amnesty is available to individuals and businesses, but only if they turn themselves in during 2011 and only in respect of assets held in countries from which Denmark could not obtain bank information at 1 January 2008.

Taxand's Take

Danish clients with assets abroad will be impacted by the introduction of this scheme and could potentially benefit from the amnesty.

It should be noted that the Minister of Taxation now has the authority to buy information if he deems it to be relevant. This is important move for multinationals; assets not previously declared may now be more easily identified.

Your Taxand contact for further queries is:
Anders Oreby Hansen
T. +45 722 73 602

Taxand's Take Author