New rules to avoid tax evasion

Too many people exploiting the system

According to the country's central bank, Nationalbanken, Danes stashed away some 275 billion kroner in tax havens last year, Metroexpress reports.

Although these were predominantly legitimate investments, the tax minister, Benny Engelbrecht, has decided to put together a new set of ethical rules for tax consultants.

In a report 'Stronger consultant and industry cooperation against cross-border tax evasion,' Engelbrecht presents five guiding principles. 

Some balance on the edge
The TV channel DR1 recently aired a program, 'In tax havens', which revealed how consultants counsel people to exploit the tax system.

Although there may be individual accountants and lawyers who cross boundaries, John Bygholm, the head of taxation at the Institute of State-authorised Accountants (FSR), believes the ones who really prosper in tax evasion counselling are not part of any professional association.

Meanwhile, Paul Mollerup, the managing director at Danish Lawyers, calls the report "a reminder that will hopefully reach also those with a tainted business model".

The five new ethical rules for tax consultants

1) The tax consultation should be based on required information as much as possible. In cases in which advice is given on a general basis without in-depth knowledge of the case and precise knowledge of the intended use of the consultancy, the adviser should be particularly vigilant. 

2) The tax consultant should pay special attention to demands for unusual solutions or advice involving the use of the so-called tax havens.

3) Every tax consultation must assume that all relevant information can be verified. It is unacceptable to base tax consultation on a case that cannot be detected.

4) If there is a good reason to doubt the tax assessment, and it is not clarified, the consultant should include it in the tax statement so SKAT can assess it if need be.

5) If appropriate, the tax adviser should consider asking additional questions regarding the specific tax assessment, such as the risk of negative publicity. This will depend on each case and the client's specific situation.