Denmark: Danish Tax Amnesty Available Until 30 June 2013

Following adoption by the Danish Parliament on 8 May 2012, a Danish tax amnesty scheme is now open up to and including 30 June 2013.

In summary, the scheme offers Danish taxpayers - individual and corporate - with undisclosed funds in foreign banks, etc. the possibility of voluntarily declaring such income and assets to the Danish Tax Authority at a reduced penalty and without risk of prison sentence.

Irrespective of the amount of taxes evaded, the scheme provides for a maximum fine of no more than 60% of the Danish taxes payable on the undisclosed income, etc. Outside of the amnesty scheme, tax evasion would, depending on the amounts concerned, etc., be subject to either a fine in an amount of twice the taxes payable or prison for up to eight years. Tax evasion exceeding DKK 500,000 normally results in imprisonment.

In addition, interest is payable on any taxes owed. The fine is not payable on the interest. It is a condition for obtaining the 60% fine, that taxes and interest are effectively paid.

The scheme applies only to undisclosed funds located in countries from which the Danish Tax Authority cannot obtain information under a tax treaty in force on 1 January 2008. Accordingly, amnesty is available for undisclosed funds in, e.g., Switzerland and Liechtenstein, but not for the following jurisdictions:

Argentina, Armenia, Australia, Azerbaijan, Bangladesh, Belarus, Brazil, Bulgaria, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Faroe Islands, Finland, France, Germany, Greece, Greenland, Guam, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Kyrgyzstan, Latvia, Lithuania, Macedonia, Malaysia, Malta, Mexico, Montenegro, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Puerto Rico, Romania, Russia, Serbia, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Sweden, Taipei, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, U.S. Virgin Islands, Uganda, Ukraine, United Kingdom, USA, Venezuela, Vietnam and Zambia.

Amnesty is not available if the Danish Tax Authority or another Danish public authority has already contacted the tax payer regarding the issue.

Tax payers wishing to make use of the scheme must make a declaration to the Danish Tax Authority, setting out details on themselves and the undeclared funds, etc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.