Denmark's largest potential tax fraud. The Danish tax authorities are taken for a ride!
For a number of years, probably from 2012 to 2015, a number of the most reputed and biggest Danish companies, such as Danske Bank, Novo Nordisk, and Vestas, have confirmed that they have been abused in the presumed tax fraud.
The Danish tax authorities have announced that they have reason to suspect
that Denmark has fallen victim to an international tax fraud scheme so
far amounting to DKK 6.2 billion. Danish police are investigating the
matter.
The potential tax fraud involves refund of tax on dividends paid by Danish
companies to certain foreign companies.
Danish companies have a duty to withhold tax on dividends distributed
to their shareholders, including shareholders resident outside of Denmark.
If the shareholder is resident outside of Denmark, the shareholder may
- subject to fulfilment of certain requirements - be entitled to a full
or partial refund of the tax withheld by the dividend-paying companies.
The Danish tax authorities suspect that a network of foreign entities
has filed claims for the refund of withholding tax on dividends based
on fictitious shareholdings in Danish companies. On the basis of these
presumably fraudulent claims for refunds, the Danish tax authorities have
made refunds to these foreign entities. It has been announced that the
fraudulent requests for refunds amounts to DKK 6.2 billion, but the number
may increase.
As a consequence of the presumed fraud, all filings for a refund of withholding
tax on dividends have been put on hold pending further investigation.
