Tax reassessment of DKK 1.2 million dropped after an early case strategy

A tax case should be handled correctly from the outset

Our approach to tax cases is that the strategy should be laid as early as possible.

When the Tax Agency begins an audit, the factual and evidential basis of the case already starts to take shape. The information, explanations and documents submitted early in the process can have a significant bearing on the later assessment of the case.

In this case, we therefore assessed the matter already at the Tax Agency's first approach and then structured the response around the questions that, in our assessment, would prove decisive.

The result was that the Tax Agency reduced the notified reassessment by DKK 1,200,000.

The client thereby avoided not only a substantial tax payment but also the consequences that such a reassessment can entail in the form of interest, possible fines and the risk of a subsequent tax criminal case.

Disguised dividends can have serious consequences

Cases on disguised dividends can be very burdensome for both the company and the owner.

If the Tax Agency considers that a company has incurred an expense for the owner's personal benefit, or that values have otherwise accrued to the owner, the consequence can be personal taxation of the shareholder.

It is therefore decisive to establish the factual circumstances and documentation early, so that the case does not develop on an incorrect basis.

Once the Tax Agency has made a decision, the case can become both longer and more expensive to change through the appeal system.

The first response can be decisive

We often find that clients seek specialised advice only once the Tax Agency has already made its decision.

At that point, explanations may have been given or material presented that makes the further case more difficult than necessary.

We therefore generally recommend that a tax case be assessed already at the Tax Agency's first approach, particularly when the case concerns larger amounts, disguised dividends, VAT or other matters that may also carry criminal tax consequences.

A clear strategy from the outset can, in some cases, be the difference between a protracted appeal and a resolution already at the Tax Agency.

Received an approach from the Tax Agency?

We assist in tax cases from the first audit by the Tax Agency and throughout the subsequent appeal and court process.

If you have received a request for information, a proposed decision or a decision from the Tax Agency concerning, for example, disguised dividends, distributions, company expenses or any other reassessment of your income, you are welcome to contact us for an initial assessment of the matter.