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Tax evaders copy Bayern boss and confess

Thousands of German tax-evaders have contacted the authorities to clear their books and pay up what they owe. They are possibly inspired by the example of Bayern Munich president Uli Hoeneß - or the increased chances of getting caught.

Tax evaders copy Bayern boss and confess
Photo: DPA

More than 9,000 worried tax-evaders handed themselves in during the first half of this year – a huge number when compared to the 11,800 cases seen in the whole of last year, according to a survey of state finance authorities conducted by DPA.

Handing oneself in is a way to avoid punishment, providing everything is included in the confessional tax statement.

The Baden-Württemberg state finance ministry said around 2,360 people had contacted them during the first half of the year, admitting they had not been honest. In Bavaria the number was 1,179. It was there that Hoeneß admitted he had a fortune stashed away in a secret Swiss bank account.

Experts say his example may have inspired others – but that the purchase by some tax authorities of confidential information from insiders at Swiss banks would have a similar effect.

Norbert Walter-Borjans, state finance minister for North Rhine-Westphalia (NRW) said the purchase of the confidential information – often stolen – was the only way to proceed considering the lack of official transparent information transfer.

He said his state would stop buying the CDs of information only when attempts to dam tax evasion were stepped up.

NRW has already bought six such CDs, paying around €9 million for the lot – a cost which was shared by other states, said Walter-Borjans. But he said that nationwide the information stored on the CDs, and the increase in voluntary confessional tax statements, had brought in around €3 billion.

“It is high time for close cooperation of all countries in the fight against tax evasion and tax avoidance. We need international information exchange which is deserving of the name,” he said.

The Local/DPA/hc

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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