The amount of transactions between Denmark and tax havens over the last five years has totaled DKK 1 trillion (approx. USD 182 billion).
The Tax Ministry of Denmark has released new data and launched an investigation into the vast amounts of transactions between Danish entities and tax havens. The investigation is part of the Ministry’s Project Money Transfer, which began with request to national banks to provide extensive information on customers’ money transfers to countries considered to be tax havens by the Tax Ministry. The requests were met with immediate opposition from banks, a move which raised public interest and built up awareness of︀ a situation that could becomes the country’s biggest tax scandal ever.
Initial investigations into the︁ transfer data revealed evidence of at least 450 companies whose sole purpose is to pipe︂ capital from one country into another, which in most cases is a low tax jurisdictions.︃ Between the years 2007 and 2009, 85 of the 450 companies had recorded transactions exceeding︄ DKK 100 million (approx. USD 18.2 million).
However, tax experts were quick to quell negative︅ comments, saying that the figure could represent a large amount of legitimate business and︆ legal tax planning. Jorgen Horiwitz, director of the Danish Bankers Association, pointed to the fact︇ that UK is currently included in the list of countries considered to be tax havens︈ by the Tax ministry of Denmark. As the UK is a primary export market for︉ Denmark, a large part of the DKK 1 billion is explained by legitimate trade. Transactions︊ with the UK account for more than half of the listed transfers. Likewise, Christen Amby,︋ Danish tax expert, added that many of the transactions would have been completely genuine financial︌ transactions, due to the inclusion of financial centers like Switzerland and Hong Kong.
However, other︍ tax experts point to the likelihood of the money transfers involving companies, which are created︎ with the sole purpose of piping capital from one jurisdiction to another, or transferring undeclared️ assets to low tax schemes and bypassing regular Danish tax regulations. Transactions involving the Bahamas, Cayman Islands, the British Virgin Islands and the Isle of Man are being investigated in particular to find evidence of such arrangements. Commenting on the possible use of suspicious company structures and dormant companies, Preben Buchholtz Hansen, the head of the Tax Ministry’s economic crime division, said, “…we can see that there’s been deposits and withdrawals of more than one trillion kroner, and I’d be very surprised if it was all done by the book.”
Bent Greve, taxation expert at Roskilde University, estimates that up to DKK 15 billion (approx.︀ USD 2.7 billion) of the total DKK1 billion is a direct result of explicit and︁ purposeful intentional tax fraud. He believes that the outcome of Project Money Transfer and any︂ subsequent prosecutions will aid Danish authorities in improving legislation surrounding the use of questionable tax︃ methods by accountants, lawyers, banks, and other service providers in the financial industry, when dealing︄ with potential tax havens and “grey” financial jurisdictions.
The Tax Ministry of Denmark considers the︅ following jurisdictions to be tax havens (September, 2010):
Very interesting that the UK are rated as TAX Havens as well ??
The Tax Ministry of Denmark has released new data and launched an investigation into the vast amounts of transactions between Danish entities and tax havens. The investigation is part of the Ministry’s Project Money Transfer, which began with request to national banks to provide extensive information on customers’ money transfers to countries considered to be tax havens by the Tax Ministry. The requests were met with immediate opposition from banks, a move which raised public interest and built up awareness of︀ a situation that could becomes the country’s biggest tax scandal ever.
Initial investigations into the︁ transfer data revealed evidence of at least 450 companies whose sole purpose is to pipe︂ capital from one country into another, which in most cases is a low tax jurisdictions.︃ Between the years 2007 and 2009, 85 of the 450 companies had recorded transactions exceeding︄ DKK 100 million (approx. USD 18.2 million).
However, tax experts were quick to quell negative︅ comments, saying that the figure could represent a large amount of legitimate business and︆ legal tax planning. Jorgen Horiwitz, director of the Danish Bankers Association, pointed to the fact︇ that UK is currently included in the list of countries considered to be tax havens︈ by the Tax ministry of Denmark. As the UK is a primary export market for︉ Denmark, a large part of the DKK 1 billion is explained by legitimate trade. Transactions︊ with the UK account for more than half of the listed transfers. Likewise, Christen Amby,︋ Danish tax expert, added that many of the transactions would have been completely genuine financial︌ transactions, due to the inclusion of financial centers like Switzerland and Hong Kong.
However, other︍ tax experts point to the likelihood of the money transfers involving companies, which are created︎ with the sole purpose of piping capital from one jurisdiction to another, or transferring undeclared️ assets to low tax schemes and bypassing regular Danish tax regulations. Transactions involving the Bahamas, Cayman Islands, the British Virgin Islands and the Isle of Man are being investigated in particular to find evidence of such arrangements. Commenting on the possible use of suspicious company structures and dormant companies, Preben Buchholtz Hansen, the head of the Tax Ministry’s economic crime division, said, “…we can see that there’s been deposits and withdrawals of more than one trillion kroner, and I’d be very surprised if it was all done by the book.”
Bent Greve, taxation expert at Roskilde University, estimates that up to DKK 15 billion (approx.︀ USD 2.7 billion) of the total DKK1 billion is a direct result of explicit and︁ purposeful intentional tax fraud. He believes that the outcome of Project Money Transfer and any︂ subsequent prosecutions will aid Danish authorities in improving legislation surrounding the use of questionable tax︃ methods by accountants, lawyers, banks, and other service providers in the financial industry, when dealing︄ with potential tax havens and “grey” financial jurisdictions.
The Tax Ministry of Denmark considers the︅ following jurisdictions to be tax havens (September, 2010):
- Austria
- Andorra
- Anguilla
- Antigua & Barbuda
- Aruba
- Bahamas
- Bahrain
- Barbados
- Belize
- Cayman Islands
- Cook Islands
- Cyprus
- The U.S. Virgin Islands
- British Virgin︆ Islands
- United Arab Emirates
- Netherlands Antilles
- Dominican Republic
- UK
- Gibraltar
- Grenada
- Guatemala
- Guernsey
- Hong Kong︇
- Isle of Man
- Isle of Sark
- Jersey
- Latvia
- Liberia
- Liechtenstein
- Lithuania
- Luxembourg
- Macau
- Maldives
- Marshall Islands
- Monaco
- Montserrat
- Nauru
- Niue
- Panama
- Samoa
- San Marino
- Switzerland
- Seychelles
- Singapore
- St. Kitts and︈ Nevis
- St. Lucia
- St. Vincent and the Grenadines
- Tonga
- Turks and Caicos Islands
- Vanuatu
Very interesting that the UK are rated as TAX Havens as well ??