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Denmark to invest in tax administration overhaul

Denmark to invest in tax administration overhaul

COPENHAGEN: The Danish Government will spend DKK10.5bn (USD1.68bn) in reforming Denmark’s tax administration over the next few years, according to the Tax Ministry.

Denmark’s tax authority, the SKAT, will be replaced by seven independent management boards on July 1, 2018, in an attempt to introduce more specialization across a wide area of tax administration.

Last year, parliament approved DKK5bn of additional funding for the tax authority. However, in order to ensure that the new administrative system is properly resourced, a further DKK5.5bn has been allocated to the tax authority in the 2018 Finance Act, the Tax Ministry said.

“When we build a whole new tax administration, it is crucial that we do not repeat the mistakes of the past. Therefore, the seven new boards that replace SKAT must not be born with savings. They are to be born with investments. And the Government is doing so with a historically large supply of resources,” said Tax Minister Karsten Lauritzen.

The Government plans to hire an additional 1,800 tax authority staff by 2021 and investment in new information technology systems.

The additional investment will also help it to target areas of the tax regime which are prone to avoidance and evasion, particularly in the area value-added tax, the Tax Ministry said.