Danish taxpayers who have not declared deposits etc. in for example foreign banks, and who have not already been contacted by the Danish Tax Authority or other Danish authorities regarding the issue, have the possibility of voluntarily declaring the deposits against a reduced fine and without the risk of imprisonment. Deadline is on 30 June 2013.
The amnesty
Irrespective of the amount of the tax evaded, the amnesty ensures that the taxpayer is only fined and there is no risk of imprisonment. The fine cannot exceed 60% of the tax evaded on the condition that the tax and the interest thereon are effectively paid. The fine is calculated on the basis of the tax with no interest added.
Any self-declaration under the amnesty scheme is processed administratively and consequently without contact to the police, courts of law and without publicity.
Outside of the amnesty scheme - depending on the amount of the taxes evaded - the penalty may either be a fine of twice the evaded taxes or imprisonment for up to eight years. Tax evasion exceeding DKK 500,000 will usually result in imprisonment.
Who can make use of the amnesty?
The act applies to both individuals and businesses and is first and foremost of importance to Danish taxpayers having failed to declare deposits in accounts or assets deposited in foreign banks, etc.
However, the amnesty may also be of importance to Danish taxpayers with relations to a foreign trust or similar, or who have capital life insurance abroad.
Which countries are comprised?
The tax amnesty only applies to undisclosed funds located in countries or jurisdictions from which the Danish Tax Authorities cannot obtain information under a tax treaty in force on 1 January 2008.
The amnesty can therefore be applied in relation to funds deposited in e.g. Switzerland and Liechtenstein, but not for the following countries:
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.
Procedure
Taxpayers wishing to make use of the scheme must make a declaration to the Danish Tax Authority. Complete details on the evaded funds must be given, and complete documentation must be presented.
The declaration must reach the Danish Tax Authority no later than 30 June 2013.
We encourage you to seek advice before any declaration is made.
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.
