Danish WHT scandal: Civil proceedings against British financiers and companies

According to the news site Law 360 and online articles published by the Danish Broadcasting Corporation, the majority of writs filed include claims against British financiers and companies for having money laundering and camouflaging the proceeds from fraudulent dividend tax reclaims. Further, other writs have been filed against banks in order to obtain information about customers believed to have been involved in the fraud.

The setup behind the scandal

According to the Danish tax authority, pension funds have been used in a systematic fraud where Danish dividend withholding tax has been reclaimed even though the pension funds have not owned shares in the Danish dividend paying companies.

According to writs filed, it is the Danish tax authority's view that the alleged fraud was organized and centered around London. The authority is therefore in the process of acquiring customer information from key banks and financial institutions in London regarding customers suspected of having been involved in the alleged fraud.

The Danish Ministry of Taxation earlier this year initiated US civil proceedings against several US pension funds and other entities and individuals, including advisors, see Kromann Reumert's news article of August 6 2018: Foreign civil proceedings against dividend WHT claimants and their advisors.

With the most recent initiative, the Danish tax authority has now initiated civil proceedings against entities and individuals in the US, Canada, Luxembourg, Malaysia and Great Britain.