Amnesty plan entices tax evaders to come clean
Danes with money hidden in bank accounts outside of the country are being offered the opportunity to report the funds and avoid criminal prosecution for tax evasion.
An amnesty plan set up by tax authority Skat is not set to expire until June 2013, but private tax advisors report that many citizens have been asking how they can report their foreign assets to take advantage of the amnesty and avoid penalties for stashing money in foreign banks. The burst of honesty could mean a windfall for the state coffers.
Torben Bagge, one of the country’ most experienced tax attorneys, said he was "very surprised" at the number of his clients who have sought legal help and advice on hidden fortunes in countries like Luxembourg and Switzerland.
"Everyone from regular employees with good jobs and pensions to the self-employed are trying to ascertain whether they can register their earnings without risking being prosecuted," said Bagge.
Bagge explained that some Danes have been stashing as much as 100,000 kroner annually in foreign banks. He called some of the cash “ill-gotten gains” and said the rest may have come via inheritance or real estate deals.
"Often people drive to countries that don’t ask a lot of questions and put their money in accounts that pay higher interest,” said Bagge.
Although Skat reported that only five people have actually signed up to take advantage of the tax amnesty plan, Bagge predicted that more people would turn themselves in over the winter.
The amnesty scheme began on July 1 and was introduced to give Danes that have stashed millions abroad the chance to avoid prosecution for tax evasion.
Apparently not every tax cheat can take advantage of the amnesty plan, though. Some 500 “wealthy Danes” recently received a letter from Skat informing them that they were already in the agency’s crosshairs for transferring money offshore. Skat said that amnesty only applied to people that turned themselves in, not those that were already being investigated for cheating.
Some 11,000 people and businesses have been selected for further investigation after analyses of transactions between Danish bank accounts and accounts in tax havens. About 800 of those have received tax bills amounting to 735 million kroner. Skat said that approximately 300 of that number could be punished by fines or imprisonment, depending on how many they decide to report to the police.