Three cases of tax liability ruled in favor of the indiviudal

The Danish Tax Tribunal (“Landsskatteretten”) has ruled in three similar cases (1, 2 and 3) regarding Danish tax liability for individuals living abroad. All the cases have in common that they:

1) Have been raised under the Danish tax authorities “Money Transfer Project”,

2) It regards individuals, who have previously resigned Danish tax liability,

3) All the individuals were found by the tax authorities to be tax liable to Denmark due to credit card activities combined with other relations to Denmark,

4) If the assessment regards years passed the ordinary deadline for changes, the individuals were found to have acted with gross negligence and

5) All cases were ruled in favor of the individual by the Tribunal effectually dismissing the changes invoked by the tax authorities.


Documentation is argumentation

As mentioned many times before the ability to document whereabouts and activity is crucial in any international tax environment. In all three cases the tax authorities do not have sufficient evidence to back the case of substantial stay or non-holiday activity in Denmark.

In cases as these were the individual is considered to be moving into Denmark it is the tax authorities, who needs to prove beyond doubt that the individual is subject for taxation. However, arguments are made that when some elements are present (e.g. abode) the burden of proof changes to be at the individual. Whether or not this is the case it places a large burden on the individual to actually provide this proof in order to avoid escalation and ultimately tax liability.

As such, maintain records and carry out the necessary compliance measures (submit tax return, disclose information etc.) in the countries you are engaging in activities with. The world is turning towards transparency and in that process your details will be accessible and addressed with different intentions and you should always be able to counter-argue based on documentation.


About Project Money Transfer

Project Money Transfer 1 and 2 have been a way for the Danish tax authorities to collect information on foreign bank transfers and credit card usage in Denmark since 1st July 2004. The projects have resulted in a number of cases like the ones mentioned above and is expected to collect several billions in unpaid taxes.


Our experience

We have assisted in a number of cases similar to the above and you are welcome to contact us, if you are in need of assistance.


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