News in Digest: The taxman who keeps on ringing - The Post

News in Digest: The taxman who keeps on ringing

Whether it’s recovering unpaid income tax, funds hidden in havens or payments to fraudulent foreigners, SKAT is constantly on the move

No income tax, no VAT … they’ll come knocking at your door (photo: Pixabay)
April 16th, 2019 4:00 pm| by The Copenhagen Post

Ever noticed how nobody ever protests about the usage of the word taxman. They complain about the use of actress, chairman, and freshman even, but never taxman. In truth, nobody ever rallies to their cause, and they do tend to get a bad press.

Plenty coming back
This past fortnight has been different, though. While it’s accurate to say he taketh away, he also giveth, and fortunately for us law-abiding citizens, he has mostly been giving.

Some 3.4 million lucky citizens (so pretty much everybody) have together shared 16.2 billion kroner over the past month – owing to them paying too much tax in 2018. On average, that is 4,717 kroner per person.

Nevertheless, Karoline Klaksvig, the deputy head of Skattestyrelsen, doesn’t think the overpayment of tax is a good thing, and she urges people to keep a better check on their preliminary income assessments – especially if there are big changes in their lives such as a property purchase, new job or a divorce.

Money well spent
On the flip-side, around 1 million Danes have paid too little and together they owe an estimated 6.3 billion kroner, but that is a drop in the ocean compared to the 315 million kroner owed in taxes by the 155 Danish entities implicated in the Panama Papers.

The Tax Ministry paid just over 6 million kroner for information from the April 2016 leak pertaining to Danes – principally regarding how a Panamanian legal firm had set up tax evasion schemes using strawmen in tax havens to prevent the relevant authorities finding out how much tax was owed and by whom.

The tax minister, Karsten Lauritzen, feels that 6 million kroner was money well spent. However, time will tell how much is paid back.

In total 8 billion kroner has been demanded back worldwide, with the UK (1.6 billion), France (900 million) and Australia (600 million) among the big claimants.

Huge legal fees
In related news, pursuing foreign entities that exploited a loophole in the Danish system, which enabled them to get their withholding tax reimbursed, is a costly business as the state owes 2.4 billion kroner in legal fees to lawyers in the US, Canada, the UK, Germany and Luxembourg.

The lawyers are helping the state to recover 12.7 billion kroner, and they have brought cases against 470 parties in five countries.

And finally, the online property rental service Airbnb has announced that from July 1 the company will start automatically reporting information on rentals to the tax authorities – making Denmark the first country in the world to have an automatic agreement of this sort with a shared economy provider.