Denmark: Companies can now get their legal costs covered in connection with tax disputes

This is good news for companies in Denmark that want to appeal decisions made by the Danish Tax Authority, SKAT. Refunds of at least 50 % in tax disputes about tax, VAT, and duties were re-established at the turn of the year.

In 2009, the possibility of refunds for companies and funds was repealed. Up until the turn of the year, only individuals could therefore obtain refund of legal costs.

On 1 January 2017 though refunds of legal costs for companies and funds were re-established, as the Danish government reached an agreement with a majority in the Danish Parliament to implement Retssikkerhedspakke II. The system also applies in disputes commenced before the turn of the year. In these disputes though, only legal costs for work carried out after the turn of the year are covered.

This means that profitability will no longer be a decisive factor when considering whether to appeal a wrong decision.

At least 50 % of the costs will be covered

The legal certainty for companies and funds will be substantially improved when once again it will be possible to have legal costs covered in disputes handled in the administrative complaint system and in the courts. The intention with the Retssikkerhedspakke II was to improve the legal certainty for the citizens.

The refund covers 50 % of costs for legal assistance, legal fees and ordered legal costs, if the company or the fund do not succeed in court.

The costs are covered in full, if the companies and funds succeed or predominantly succeed in court. In addition, the costs will be covered in full, if the Danish Ministry of Taxation carries on a dispute.

Do you wish to appeal?

The new rules make it economically possible for companies in Denmark also to appeal decisions in minor tax claims. The question of profitability ought therefor not to be a barrier for appealing a wrong decision.

We offer to assess your case and to estimate the possibility of a favourable result free of charge. Contact tax attorney Robert Mikelsons at rom@njordlaw.com or tel. (+45) 77 40 10 30.

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