The Supreme Court acquits taxpayer of charges of tax evasion

28 August 2020

Anders Kiærskou, Manager, Tax |

Consequently, the verdict of the High Court was repealed, meaning that the taxpayer was relieved of a 6-month suspended prison sentence and a fine of DKK 750,000.

The case concerned a taxpayer, who had earned capital gains from selling of shares amounting to approx. DKK 2,7 million during the tax year.

However, the annual tax statement only showed a capital gain of approx. DKK 200,000, and the taxpayer had not filed a tax return to correctly declare the capital gains. Instead, the taxpayer had relied on the stockbroker’s reporting to the Danish tax authorities as sufficient.

The Supreme Court ruled that the taxpayer was not responsible for incorrect reporting made by the stockbroker and the inability of the IT-systems of the Danish tax authorities to automatically calculate capital gains in certain situations. Consequently, the taxpayer was acquitted.

Despite the acquittal, the case shows that taxpayers are best served by making sure their tax statements are correct. Particularly, when owning securities deposited in non-Danish banks, the taxpayer must declare capital gains/loss himself, as foreign banks generally do not report to the Danish tax authorities.

The deadline for filing the Danish tax return for 2019 is 1 September 2020. If you need assistance in preparing and filing your Danish tax return, BDO can help you.

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge. Please sign up here.