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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.

Published: 3 April 2019 12:56 CEST
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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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?

Published: 30 October 2023 15:21 CET
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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