Tax cases, costs
Cost reimbursement in tax cases
Part of the cost of legal assistance in a tax case can be reimbursed. Here is how the rules work in practice.
When a tax or duty case is pursued through the appeals system or the courts, part of the cost of expert assistance can be covered under the rules on cost reimbursement.
This page explains who can apply, which cases are covered, when reimbursement amounts to 50 or 100 percent, and how the application relates to the appeal case itself.
What is cost reimbursement?
Cost reimbursement is a scheme under which the public purse covers part of the cost of expert assistance when a tax or duty case is pursued through the appeals system or the courts.
The purpose is to ensure that a person does not refrain from having a decision reviewed merely because assistance costs money. The scheme covers, among other things, legal assistance. An application for cost reimbursement is submitted to the Danish Tax Agency, which administers the scheme for expenses relating to expert assistance that is to be paid, or has been paid, according to an invoice.
How much can be covered?
As a general rule, reimbursement is granted for 50% of the eligible expenses. If the applicant is granted full or predominant success in the case, the expenses can generally be reimbursed at 100%. The assessment of the degree of success is based on the outcome of the case.
Which cases are covered?
The scheme applies to the handling of tax and duty cases in the appeals system and the courts. Typical examples:
- Appeal to the Danish Tax Appeals Agency, a tax appeals board or the National Tax Tribunal.
- Judicial review of a decision made within the appeals system.
- Reopening cases, to the extent they are covered by the scheme.
The Danish Tax Agency's own case processing, i.e. the period before a decision that can be appealed exists, is generally not covered in the same way. This is one reason it is worth clarifying the coverage before work begins.
There are also special restrictions for certain companies and funds, and a number of case types fall outside the scheme. The assessment should therefore be made on a case-by-case basis.
Who can apply?
Not every taxpayer can obtain cost reimbursement. Eligibility depends, among other things, on who is a party to the case and what type of taxpayer is involved. Special restrictions apply to companies and certain other legal entities. It should therefore be clarified specifically whether the case and party in question are covered by the scheme.
The reimbursement accrues to the party to the case who is liable for the cost of the assistance. The claim for reimbursement can be assigned to the provider of the expert assistance, so that the party does not have to advance the entire amount and wait for settlement. Such an assignment is agreed explicitly from the outset.
How the application relates to the appeal case
The application for cost reimbursement is a separate case, but it closely follows the course of the appeal case.
- 01The appeal case is prepared and submitted.
- 02The assistance is carried out and invoiced with a specification of the work performed.
- 03The appeal or court case is decided, and the outcome determines the level of coverage.
- 04The application is submitted together with the decision, the invoice and documentation of the work.
- 05The Danish Tax Agency issues a decision on the reimbursement.
An accurate and thoroughly prepared invoice specification matters in practice. Unclear descriptions of the work are a common reason why an application is not fully granted.
Claims for cost reimbursement are subject to limitation rules. It is therefore important not to delay unnecessarily in applying for reimbursement.
What does this mean for the decision to appeal?
For many clients, the scheme changes the calculation. A case that initially seems too expensive to pursue looks different once you know that half the cost can generally be covered, and the entire cost if the case is won to a predominant degree.
Cost reimbursement does not mean that every tax case should be pursued. At HAY LAW, we assess from the outset both the legal basis of the case, the evidence and the financial consequences of proceeding.
More answers about tax cases
Questions about letters from the Danish Tax Agency, access to documents, deadlines and the appeal process are gathered in one place.
Cases where a favourable outcome was achieved
- Full victory in a tax case. DKK 2,850,000 reassessment reduced to DKK 0
The matter was conducted by attorney Hussain Ali Alhaidary. Hussain Ali Alhaidary
- Landmark ruling on disguised dividends, supplier expenses allowed
The matter was conducted by attorney Hussain Ali Alhaidary. Hussain Ali Alhaidary
This page provides general information and is not a substitute for specific legal advice. The level of reimbursement depends on the outcome of the case and the applicable rules.
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