Danish Tax Criminal Case Involving DKK 6.5 Million Closed Without Prosecution

Disagreement about the company's taxable result

The central question was whether the way the company had calculated its tax result could form the basis for criminal liability.

In the civil tax case, the Tax Agency had prepared a different calculation of the company's taxable income than the one the company itself had applied.

However, it was our view that such a tax disagreement could not in itself lead to the client's conduct being deemed criminal.

During the criminal case, we argued, among other things, that the company had a basis for the deductions reported to the Tax Agency, and that the method used to calculate the profit was not an attempt to evade tax.

The criminal case was closed

After the overall handling of the case, the Criminal Case Unit found no basis to proceed with criminal liability.

The case was therefore closed without further prosecution.

For the client, this meant that a case involving the risk of both a custodial sentence and a criminal exposure of around DKK 6.5 million was closed.

A tax disagreement is not necessarily a criminal act

The case illustrates a fundamental distinction between a tax case and a tax criminal case.

The fact that the Tax Agency, in a civil tax case, considers that a company's income or deductions should be calculated differently does not automatically mean that the company or its management has committed a criminal act.

In a tax criminal case, an independent assessment must be made of, among other things, what actually happened, what basis the company had for its tax treatment, and whether there was intent or gross negligence.

This is precisely why the criminal element of a tax case must be assessed independently and not merely as an extension of the Tax Agency's civil decision.

Involved in a tax criminal case?

We assist companies, directors and private individuals in tax criminal cases concerning, among other things, tax evasion, VAT evasion, deductions, calculation of taxable income and liability cases before the Danish Tax Agency's Criminal Case Unit.

If you have received a notice of a liability case, have been charged, or your case has been referred to the Criminal Case Unit, you are welcome to contact us for a confidential and non-binding assessment of your case.