Frequently asked questions about tax cases

The first step is to establish what type of enquiry it is. The Danish Tax Agency may, among other things:

• request information and material from you or your company as part of an audit
• notify a change of tax or VAT in a proposed decision
• issue a decision changing tax, VAT or duties
• refer the case for assessment of possible criminal liability.

It is important not to overlook the deadlines stated in the letter. At the same time, you should as a rule gain an overall view of the case before providing an extensive explanation or submitting material to the Tax Agency. The earlier we are involved in a tax case, the better we can structure it from the beginning.

A request for material can be the first sign that the Tax Agency is examining a particular matter. It should therefore first be clarified what the audit concerns, which income years or duty periods are being examined, and why the Tax Agency is requesting the specific information. It can then be assessed which material should be submitted and whether there is also a need to elaborate on the factual or legal circumstances. It is often at this early stage that the foundation for the subsequent tax case is laid. How the case is handled during the Tax Agency's audit can therefore be of great importance.

A proposed decision means that the Tax Agency has not yet made its final decision. You therefore have the opportunity to object to the Tax Agency's assessment before a decision is made. We will typically review:

• whether the Tax Agency has understood the facts correctly
• whether the authority has all relevant information
• what material the case is based on
• whether tax legislation has been applied correctly
• which evidence and legal arguments speak against the proposed change.

In many tax cases the disagreement is not purely legal. It may also be because the Tax Agency has adopted a different understanding of the factual circumstances. It is therefore important that the facts, documentation and law are all thoroughly reviewed before comments are submitted on the proposal.

That can often be relevant. To assess a tax case properly, it is important to know the material and information on which the Tax Agency bases its assessment. We regularly see a taxpayer or their adviser engaged in lengthy dialogue with the Tax Agency without having the full picture of the authority's material. As part of our handling of a tax case, we therefore also assess whether access to the file should be requested before the case proceeds.

If you disagree with the Tax Agency's decision, it should promptly be assessed whether the decision should be appealed. Depending on the circumstances, a tax decision can be brought before the Danish Tax Appeals Agency and later heard by, for example, a tax appeal board or the National Tax Tribunal. In relevant cases it can also be brought before the courts. The right route depends on the specific case. Among other things, we review the decision, the case documentation, the legal questions and the financial consequences, and then assess how the case is best pursued. It is important to act quickly, as deadlines apply to both administrative appeals and bringing the case before the courts.

In certain cases a decision can be brought directly before the courts instead of first being handled administratively. Whether that is the right solution, however, is a strategic assessment. For most tax cases it will be relevant to first consider an appeal to the Tax Appeals Agency, while other cases may involve circumstances favouring judicial review. At HAY LAW we conduct tax cases both before the administrative appeal bodies and before the courts.

That is one of the matters that should be investigated as early as possible. A tax case can in certain cases lead to an assessment of whether there are grounds for criminal liability. This may, for example, be relevant in cases concerning incorrect information, withheld turnover, VAT, majority-shareholder matters or other tax and duty issues. If there is a risk of a criminal tax case, the ordinary tax case and the possible criminal liability should be considered together. Information and explanations given during the tax case can matter later in the process. HAY LAW has a particular focus on criminal tax law. Our lawyers in the field have experience from the prosecution service and therefore know the criminal process, investigation and assessment of evidence in depth. We use this to consider the tax and criminal tracks together from the outset.

It depends on the case. The prospect of a criminal tax case does not in itself mean that you should refrain from challenging the underlying tax assessment. On the contrary, the question of whether the Tax Agency's tax assessment is correct can be of great importance for the further process. It does, however, require an overall assessment of the tax case, the possible criminal case, the financial scale of the case and the objections that can be raised.

That is entirely normal. Tax decisions can be extensive and rest on both complicated factual circumstances and difficult tax legislation. If you are in doubt, a tax lawyer can review the decision and assess whether there are grounds for having it changed. At the same time we consider whether the decision may have other consequences, for example for other income years, companies, majority shareholders or in relation to possible criminal liability.

In many appeal and court cases concerning tax, VAT and duties, cost recovery can be applied for to cover the costs of expert assistance. Whether you are covered by the scheme, and how large a share of the costs can be recovered, depends among other things on the type of case and its outcome. When we assess a tax case, we therefore also look at the possibilities for cost recovery.

An appeal does not automatically mean that the payment claim lapses. In many tax and duty cases, however, it is possible to apply for a deferral of payment of the amount the appeal concerns while the case is being processed. Whether a deferral should be sought is something we assess as part of the overall handling of the case.

Yes. In addition to ordinary tax cases we assist with, among other things, cases concerning VAT, registration duty, other duties and customs. The same applies to cases arising from decisions or audits by parts of the Danish Tax Administration other than the Tax Agency.

Yes. We advise individuals and businesses across Denmark and conduct tax cases before the Danish Tax Agency, the Tax Appeals Agency, the National Tax Tribunal and the courts. What matters to us is not where the client is located, but that the case receives the right specialised treatment.

If you have received a letter, a proposed decision or a decision from the Danish Tax Agency, or if you are concerned that your case may develop into a criminal tax case, you are welcome to contact HAY LAW. Our tax lawyers can review the case and give you an assessment of where you stand and how the case is best handled going forward. The earlier an overview of a tax case is established, the better the opportunities to lay the right strategy from the beginning. You can contact us by phone, e-mail or via the contact form on the website. We assist with tax cases throughout Denmark and emphasise that you get swift access to a lawyer who knows your field and can take responsibility for the case from the first enquiry.