Danish tax authorities in late August 2015 uncovered a possible tax fraud of up to DKK 6.2 billion related to claims for refund of Danish withholding tax under terms of an income tax treaty. The Danish tax authorities reportedly made refunds of withholding tax related to payments from Danish companies to foreign corporate shareholders based on “false documentation” (allegedly, the amounts may have been paid to foreign entities that did not own any shares in the Danish companies and accordingly had not received the Danish dividend payments on which tax had been claimed to have been withheld).
At this point in time, the Danish tax authorities announced that requests for refunds of withholding tax are “on hold” and that changes to procedures and internal controls are being considered. According to reports, there are some 6,000 pending treaty-related refund claim applications expected to be processed within a six-month period before the deadline lapses.
Also, claims based on EU law that have been filed with the Danish tax authorities by foreign investment funds are currently suspended until a decision is issued in a judicial action filed against the Danish Ministry of Taxation on behalf of a group of Nordic investment funds.
Read a September 2015 report [PDF 89 KB] prepared by the KPMG member firm in Luxembourg: Denmark: double tax treaty reclaims temporarily suspended
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