Denmark begins global legal campaign to recoup tax fraud billions

COPENHAGEN (Reuters) – Denmark has opened a global campaign to recoup billions of crowns it alleges were paid out in fraudulent tax refunds between 2012 and 2015.

Tax authorities claim a total of 2.3 billion Danish crowns ($361.36 million) in the 50 cases and will seek to open “a large number” of additional cases to bring total claims to around 11 billion crowns, Tax Minister Karsten Lauritzen told reporters in Copenhagen.

“The likelihood of getting the money back increases now that we are launching these civil court cases against those who have participated, knowingly or unknowingly,” Lauritzen said.

Denmark’s State Prosecutor for Serious Economic and International Crime said in 2015 that tax authorities may have paid almost a billion dollars in fake tax refunds. Further investigation showed the amount was actually around two billion dollars.

The money was claimed as refunds for tax deducted from stock dividends. Foreigners living outside Denmark are exempt from the 27 percent tax and are entitled to a rebate.

Cases are being brought in the United States, Britain, Canada, Malaysia and Luxembourg, according to media reports. Lauritzen declined to confirm that information.

The new court cases comes in addition to a continuing criminal investigation, which so far has led to confiscation of assets worth 2.7 billion Danish crowns, mostly in Germany.

In a related criminal case, the Danish high court on Wednesday sentenced a former employee at the tax authorities to five years in prison for corruption and dividend tax fraud. A friend of his was sentenced to four-and-a-half year in prison.