Denmark expects to recoup DKK12.7bn (£1.5bn, $2bn, €1.7bn) in tax refunds that were fraudulently claimed by foreign individuals and companies.
The investigation centres on a 27% withholding tax paid on dividends in Denmark, which foreign companies and individuals outside of the country can claim back.
In a statement on its website, the Danish tax authority’s (Skattestyrelsen) director of special control, Steen Jacobsen, said the treasury had been “cheated” out of the money.
The tax authority is working closely with the Danish attorney general and a number of foreign lawyers.
According to Reuters, cases have been brought in several countries, including the UK and US.
It cited legal website Law360.com, which reported that the Danish tax authorities filed a law suit at the High Court in London against 71 individuals and companies, alleging that pension plans and investment funds received tax refunds to which they were not entitled.
In an email to the newswire, Jacobsen wrote: “[We are] engaged in a number of civil law measures in several countries, where there may be opportunities to apply for the proceeds or to institute civil proceedings and to claim damages.”
Civil investigations were carried out in June and July in various countries, yielding a lot of material that the tax authority believes will be very important to the legal proceedings.
Dividends in Denmark
According to a Deloitte briefing note, dividends paid to non-residents are, as a general rule, subject to a 27% withholding tax.
For companies, the final rate is 22%.