Criminal cases arising from tax, VAT and other duties

A tax criminal case often arises following an audit in which the Danish Tax Agency, the Motor Vehicle Agency or another part of the Danish Tax Administration has decided to adjust, for example:

The Tax Agency's criminal case units assess whether there are grounds for establishing criminal liability.

Some cases can be handled administratively by the Tax Agency, while others, due to the nature or scope of the case or other circumstances, may be handed over to the police and the prosecution service.

If you are charged, you are granted a number of rights designed to protect you during the case. As a general rule, you are not obliged to make a statement about the criminal offence you are charged with. You also have the right to be assisted by a defence attorney.

It is important to know and understand these rights before decisions are made about, for example, attending a meeting or giving a statement to the authorities.

In criminal tax cases, the question of subjective culpability is often decisive. For central violations of Danish tax and duty legislation, criminal liability generally requires that the person acted with intent or gross negligence.

Intent means, in short, that the person realised something was wrong, for example, that income had not been declared, and wanted or accepted that consequence. Gross negligence is a lower standard, but still requires a serious departure from the diligence that could reasonably be expected. Where the line is drawn in practice depends on an overall assessment of the circumstances of the case, including the size of the amount, the duration of the course of conduct, the number of transactions, whether active steps were taken to conceal the matter, and the person's experience, knowledge and any advice received.

The distinction between intent and gross negligence matters on two levels. First, it can determine whether there is a basis for criminal liability at all, certain provisions require intent, while others can also be breached through gross negligence. Second, the culpability standard directly affects the nature and severity of the sanction: violations committed with intent are generally treated more severely than those committed through gross negligence, including in the question of whether the case can be concluded administratively or must be handled by the prosecution service and the courts.

There are no fixed templates for when intent or gross negligence exists. It is a concrete assessment in which the evidence, including correspondence, accounting records and the statements given early in the case, often plays a decisive role. That is precisely why early and qualified defence counsel can significantly influence the outcome.

The sanction in a criminal tax case depends on the specific offence and the overall circumstances of the case. There is no single fixed answer, the outcome is determined by a holistic assessment in which several factors interact.

The size of the amount matters significantly. As a general rule, the larger the evaded or allegedly evaded amount, the more seriously the authorities and the courts will view the case. But the amount never stands alone: the culpability standard is at least as important. A violation committed with intent is punished more severely, while gross negligence typically leads to a milder sanction. The duration of the conduct, whether there was systematic or deliberately concealed behaviour, and the person's other circumstances may also be taken into account.

The form of proceedings is likewise linked to the nature of the case. Less serious cases, typically fine cases, can be concluded administratively by the Tax Agency, while more serious cases are handed over to the police and the prosecution service and decided by the courts, where the sanction in the most serious cases can be imprisonment. Which route the case takes is not given in advance, it can be influenced by how the case is handled from the outset and by the documentation and information that emerges along the way.

Finally, individual circumstances can affect the outcome, for example the person's situation, genuine attempts to put matters right, and prior history. A well-prepared defence strategy can therefore influence both whether there is a basis for liability at all and, if so, what sanction the case ultimately results in.

A charge from the Tax Agency must be taken seriously, but it does not in itself mean that there are grounds for punishment.

The first step should be to gain an overview of:

If the Tax Agency wishes to hold a meeting with you as a charged person, you should not automatically either accept or decline. It depends on the specific case.

In some cases, a meeting can be an opportunity to clear up misunderstandings, present material information or shed light on circumstances the authorities were not previously aware of. In other cases, it may be more appropriate not to give a statement at that point in time.

At HAY LAW we review the case material and advise on how you should act before a statement is given or a meeting with the authorities is held. If we assess that you should attend, we prepare the meeting together with you and assist you during the meeting itself.

The particular feature of tax criminal cases is that two tracks often run in parallel. On one side is the question of whether the Tax Agency's adjustment of, for example, tax or VAT is correct. On the other side is the question of whether conduct has occurred that may lead to criminal liability.

The two questions are closely linked, but not necessarily identical. How the underlying tax case is handled can therefore be of great importance to the criminal case. Conversely, the criminal risk can also affect the strategy in the tax case.

It is precisely at this intersection that HAY LAW has its particular strength. Our tax attorneys have many years of experience with complex tax and duty cases, while our attorneys in tax criminal law have experience from the prosecution service. This means we can handle both parts of the case and set one overall strategy from the outset.

Not all tax criminal cases are concluded administratively. Some cases are handed over to the police and the prosecution service and may subsequently end as a criminal case before the courts.

If that happens, we continue as defence counsel and handle the case through the further investigation and any trial. This may include advice and assistance in connection with:

Tax criminal cases require both an in-depth knowledge of tax law and a solid understanding of criminal law and criminal procedure. At HAY LAW we work precisely at this intersection.

We advise and represent private individuals, business owners and companies throughout Denmark and assist both in the initial liability assessment at the Tax Agency and in cases that are subsequently handed over to the police, the prosecution service and the courts.

Our goal is to create an overview early, identify the factors that are decisive for the case and set a clear strategy that safeguards the client's interests throughout the entire process.

If you have been informed that your case has been referred to the Tax Agency's criminal case units, have been charged or have been told that the case may be handed over to the police, you are welcome to contact HAY LAW.

The earlier we are involved, the better our opportunity to assess both the tax case and the possible criminal liability together.

Speak with an attorney specialising in tax criminal law.