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TAXES

Danish tax authorities could recover 300 million kroner through Panama Papers

Danish tax authorities could recover over 300 million kroner for state coffers from information gathered from the leaked Panama Papers.

Danish tax authorities could recover 300 million kroner through Panama Papers
File photo: Liselotte Sabroe/Ritzau Scanpix

Up to 315 million kroner could be recovered by the Danish state in cases resulting from the Panama Papers, documents leaked in 2016 detailing financial and attorney–client information for more than 200,000 offshore entities.

A press statement released by the Danish Ministry for Taxation said that Tax Agency (Skattestyrelsen) work based on the information dump could result in over 300 million kroner being recovered by the state.

Minister of Taxation Karsten Lauritzen praised the decision by parliament in 2016 to purchase documents from the leaked Panama Papers, which enabled the Tax Agency work.

In September 2016, Danish tax authorities purchased a large data dump from an anonymous seller for 6.4 million kroner, according to information released by the ministry.

The Tax Agency has since issued 155 tax notices relating to 78 individuals and 60 companies.

That assisted Danish authorities in identifying persons or entities that hid taxable sums of money from the Scandinavian country through tax havens.

The papers cost 6.4 million kroner to access but could potentially help to recover 315 million kroner, the ministry wrote in its press statement on Wednesday.

“Although it was, at the time, a difficult decision to purchase the papers, it has since proved that there was plenty to be gained. And the Tax Agency has prioritised the work hugely. We are now seeing the results,” Lauritzen said in the statement.

READ ALSO: Denmark pays for Panama Papers data on own citizens

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MONEY

Denmark scraps popular tax deduction for home improvements

A tax deduction for home improvements, the “håndværkerfradrag”, is to be scrapped in 2022 after parties agreed to end it in next year’s budget.

A popular tax subsidy for home improvements, the
A popular tax subsidy for home improvements, the "håndværkerfradrag", will end in Denmark on April 1st 2022. Photo: Signe Goldmann/Ritzau Scanpix

The government, along with its left wing allies Red Green Alliance, Social Liberals and Socialist People’s Party; and minor parties Alternative and the Christian Democrats, presented the 2022 budget on Monday, including an agreement to drop the home building subsidy.

Sofie Carsten Nielsen, leader of the Social Liberals, said “we are dropping the building subsidy that has ignited the already overheated housing and construction market”.

READ ALSO: Four ways to (legally) lower your tax bill in Denmark

The tax deduction will be removed from April 1st next year. Other tax deductions that can be applied for home services, including cleaning and childcare, are retained.

Tax subsidies for people who hire services in their homes, termed boligjobordningen, were broadened last year as part of government measures to support the economy during the coronavirus crisis.

The provision allowed for a higher tax deduction for the encompassed home services.

Demand for builders has since increased so dramatically that supply can no longer meet demand. As such, the parties behind the budget deal reason that the deduction is no longer needed.

Additionally, the Danish central bank, Nationalbanken, has warned that high demand could contribute to an overheating of the housing market.

Although the deduction was adjusted five years ago to favour green home improvements, the government’s allied parties still maintained they wanted to scrap it.

Nielsen said on Monday that the deduction has put Denmark’s building trade under strain.

“This is an economically responsible budget which also contains huge green decisions,” the Social Liberal leader said.

Finance Minister Nicolai Wammen said that the deduction would remain applicable to other trades, including cleaning, in order to prevent cash-in-hand arrangements.

“The biggest challenge we have in regard to the Danish service industry is in building and extensions. That’s why we are revoking the building element of the (subsidies),” Wammen said.

“But we are very concerned with keeping down cash-in-hand work in the service sector,” he added.

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