Fund Taxation e-alert - Issue 2016-03 | KPMG | LU

Fund Taxation e-alert - Issue 2016-03

Fund Taxation e-alert - Issue 2016-03

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Tax fraud related to reclaim of Danish withholding tax

Update on the pending assessments of withholding tax (WHT) reclaims in Denmark.


Background

Since August 2015 the Danish Tax Authorities (DTA) have been investigating a possible tax fraud case related to the reclaiming of Danish WHT. Repayments of WHT on dividends based on the application of the respective Double Tax Treaty (DTT) from Danish quoted companies may have been granted based on false evidence to foreign entities. In practice those entities did not own any shares in the Danish companies and accordingly have not received the Danish dividend for which they have reclaimed the tax.

First estimations indicate that the amount of false WHT concerned could amount to DKK 6.2 billion.

The DTA announced in 2015 that the processing of requests for repayments of WHT would be put on hold and changes to their procedures and internal controls were under consideration.


Development and news

The DTA published a press release on 17 March 2016 informing that they will start to process WHT reclaims which have been put on hold since August 2015.

It is expected that the assessments will take some time since more than 28,000 claims have been received since August 2015. The DTA further announced that increased documentation requirements are likely to apply for the reclaims under review.


KPMG comments

Based on the announcement of the DTA, assessment decisions as well as summons to provide further documentation should be expected. Claimants concerned by the pending assessments (first WHT reclaims based on DTT and then based on EU Law) should note the potential interest payment which accrues once six months have passed since the DTA received the WHT reclaim.

For further information, please do not hesitate to contact us.

 

 

 

 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
 

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