Unreasonable Case Processing Times at the Danish Tax Appeals Agency Create Mistrust in Legal Security

Unreasonable Case Processing Times at the Danish Tax Appeals Agency Create Mistrust in Legal Security

The case concerns the income year 2014, as the tax authorities – after the expiration of the statute of limitations – increased our client's income assessment. Below, we propose a solution to the problem.

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The Complaint:

In October 2019, we appealed a decision from the Danish Tax Agency from August 2019 concerning the income year 2014.

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Waiting Time of 32 Months Extended by Authorities to 47 Months:

After a waiting period of 32 months, we received the following acknowledgment letter:

"When we received your complaint, we expected that the case would be resolved within 32 months. Unfortunately, we are unable to process the case within this timeframe, but we expect it to be resolved within 15 months from now."

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Why is it taking longer to process the case?

The Danish Tax Appeals Agency, as an appeal body, plays an important role in ensuring correct decisions. We place great emphasis on processing cases as quickly as possible, while also ensuring that the case processing is of high quality. Cases at the Danish Tax Appeals Agency are processed in the order we receive them, and all cases receive a thorough review. However, we have a very large volume of cases to handle. This means that it is taking longer than expected to resolve the case.*

What is interesting here is that, besides the fact that the Danish Tax Appeals Agency is very busy and will process cases in the order they are received, they also have an ambition to reach the correct outcome and ensure that case processing is of high quality.

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The Waiting Time is Now 60 Months:

After the above letter, the taxpayer received yet another letter in August 2023, where the waiting time was extended by an additional 15 months. After a waiting period of 60 months (5 years), we have now received another letter, resulting in a total case processing time of at least 6.5 years after the complaint against the Danish Tax Agency was submitted:

"Your case will be concluded later than expected. The Danish Tax Appeals Agency received your complaint on October 24, 2019, against the Danish Tax Agency's decision of August 30, 2019. In a letter dated August 14, 2023, we informed you that we expected your case to be concluded within 15 months. Unfortunately, we cannot process the case within this timeframe.

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Why will your case be concluded later than we expected?

The Danish Tax Appeals Agency has many cases to process. This means that it is taking longer than expected to resolve your case. Cases at the Danish Tax Appeals Agency are generally processed in the order we receive them. The Danish Tax Appeals Agency places great emphasis on processing cases as quickly as possible while also ensuring high-quality case processing. If it turns out that we cannot process the case within 18 months, we will contact you again.''

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Thus, the waiting time is now 75 months.

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Changing Explanations:

Now, the explanation is no longer that the Danish Tax Appeals Agency needs to reach the correct decision, but simply that they are busy and will process cases in the order they are received, and that the quality of the case processing must be high. This means that the first instance of appeal in this case will not be concluded until approximately 12 years after the end of the income year.

The argument that cases are processed in the order they are received is not credible, as SkatteInform knows that the Danish Tax Appeals Agency has processed many cases submitted after this one.

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Unfair Discrepancies in Legal Security for Taxpayers Compared to Authorities:

Moreover, it cannot be right that a taxpayer is forced to report income to the Danish Tax Agency within very short deadlines (reporting deadlines) and under penalty, while the Danish Tax Agency takes more than 3 years to address an increased income assessment, and the Danish Tax Appeals Agency then takes another 6.5 years to address the Danish Tax Agency’s decision and the taxpayer’s objections. There is something seriously wrong!

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Lack of Credibility:

Yes, we know that the Danish Tax Appeals Agency is not spending this time reflecting on this case to ensure that the decision is correct. Nor are they processing cases in the order they claim. No, we believe they are waiting for other decisions that have been appealed to the courts. However, they do not inform the complainant of this. Based on our knowledge of this particular case, we do not believe there are other comparable cases pending. The longer the case processing time is at the first appeal instance, the longer the taxpayers must wait for any appeals to the courts to be resolved.

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Why Are the Authorities Not Credible?

There is a lack of trust in the system when both the Danish Tax Agency and the Danish Tax Appeals Agency send out letters that taxpayers cannot rely on. The extremely long case processing times further increase mistrust in the complaint system.

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Burdening for the Taxpayer:

It can be very burdensome for a taxpayer in terms of their job situation, banking relationship, and even a significant burden on the family’s private finances to have a tax case pending for so many years. In some cases, the taxpayer has also been charged with tax fraud. These cases are often not concluded until the tax case is resolved. This means that taxpayers have the threat of a criminal case hanging over their heads throughout the entire process, which in some cases lasts more than 10 years after the end of the income year.

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Solution to the Problem:

There should be an opportunity to object to the lengthy case processing time. If the authorities cannot conclude a case within a reasonable time, the tax case should be concluded in the taxpayer’s favor, unless the delay is due to the taxpayer’s own actions.

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