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SKAT

Top Danish tax official fired after scandals cost billions

The director general of Danish tax authority Skat has been removed from his job with immediate effect, numerous media outlets reported on Friday.

Top Danish tax official fired after scandals cost billions
Jesper Rønow Simonsen was at the helm as Skat was defrauded for billions and forced to scrap its debt collection system. Photo: Søren Bidstrup/Scanpix
The firing of Jesper Rønnow Simonsen comes after months of political pressure after it was discovered that agency had been hit by multi-billion kroner tax fraud
 
Last August, it was discovered that Skat had failed to act on numerous warnings that foreign companies had drained the national system by applying for dividend tax refunds “for fictional share holdings, based on falsified documents.”
 
Dividends normally carry a 27 percent tax in Denmark. Under double taxation agreements, however, foreign companies based abroad are entitled to a refund of part or all of the Danish tax if they have paid tax on the dividend in their country of domicile.
 
Skat's investigations revealed in August 2015 that “a large network of companies abroad” had abused the system. 
 
”The expected criminal fraud in refunds has so far been calculated based on 2,120 individual claims totaling some 6.2 billion kroner in the 2012 to 2015 period,” Skat said at the time. 
 
The total cost of the fraud is now estimated at at least 12.3 billion kroner ($1.9 billion, €1.7 billion). 
 
The agency has also been plagued by problems with its tax collection IT system that could amount to a total loss of some 14 billion kroner. 
 
On Friday, Politiken reported that the Danish government plans to write-off some 7 billion kroner in Danes’ debt because the IT problems mean that it would cost more money to pursue the debt manually than the collections would bring in. 
 
According to Politiken, Danes’ have a cumulative public debt of around 90 billion kroner, including some 19 billion in unpaid personal taxes. 
 
Dennis Flydtkjær, the tax spokesman for the Danish People’s Party, said he applauded Tax Minister Karsten Lauritzen’s decision to remove Simonsen from his post. 
 
“Simonsen has been the director during these huge scandals,” he told Ritzau. 
 

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TAX

Danish customers face VAT charges on all non-EU purchases

All goods bought outside the EU will be subject to Value Added Tax in Denmark from July 1st.

Danish customers face VAT charges on all non-EU purchases
Packages in process at a Danish depot. Photo:Mads Claus Rasmussen/Ritzau Scanpix

A decision by the EU to scrap an exemption for low-value items mean that all purchases outside the bloc will now have VAT (moms in Danish) applied.

Under current rules, purchases of under 80 kroner (10 euros) do not qualify for VAT on import to Denmark, but that will no longer apply from July.

This means that anything purchased from, for example, China, the United States or United Kingdom on websites like Amazon and EBay will have VAT added to the price, no matter how small.

The Danish Customs Agency (Toldstyrelsen) said it was working to increase awareness of the incoming change amongst Danish consumers.

A recent YouGov survey, conducted on the agency’s behalf, found that 79 percent of 750 people were unaware of the impending extra VAT charges.

That proportion would correspond to over three million consumers across the entire population.

“It’s a real shame to be left with an extra bill if you think you’ve got a bargain. We want to help consumers avoid this,” said Annette Hove Nielsen, a section leader with the Danish Customs Agency responsible for customs checks on incoming packages at Copenhagen Airport.

Nielsen also directed consumers to the agency’s information page undgåprischok.dk.

Foreign residents in Denmark, particularly those from non-EU countries (including the UK since the beginning of 2021) may be more likely to have experienced VAT charges on parcels sent from abroad.

But those charges have previously only been applied in items worth over 80 kroner.

Goods purchased outside of the EU are subject to VAT at 25 percent of the purchase price. Postage and shipping charges are also generally applicable.

READ ALSO: How does income tax in Denmark compare to the rest of the Nordics?

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