Complaint structure in the tax system

Appeals Structure in Tax Cases

Be aware that as a taxpayer, you only have one opportunity to appeal your case before it can only be brought before the courts. Therefore, as a taxpayer, it is important to carefully decide which body to appeal to. Seeking advice before filing an appeal against a decision from the Danish Tax Agency can be crucial.

1. Appeals Structure for Tax Cases

The Tax Appeals Agency is an administrative appeals body. Taxpayers can file a complaint if they disagree with a decision made by the Danish Tax Agency in a tax case. The Appeals Agency receives complaints from tax cases, which are either decided by the National Tax Tribunal or a Local Tax Appeals Board. There is a fee for appealing a decision by the Danish Tax Agency, whether the appeal is submitted to the National Tax Tribunal or a Local Tax Appeals Board. The Danish Tax Appeals Agency forwards appeals to either the National Tax Tribunal or the Local Tax Appeals Board. In Denmark, the taxpayer can request that the case be handled by the Local Tax Appeals Board or the National Tax Tribunal.

1.1 Appeal options for citizens in Tax Cases

Since there is only one unified appeal body, the taxpayer has only one opportunity to appeal before a case must go to the courts. Therefore, it is crucial to assess, to which body will be the best to appeal for a given case. It is best to avoid bringing the case to the courts, as it can be expensive due to legal fees and court costs.

The Appeals Agency must refer all cases to the National Tax Tribunal if the case is of principle. A case is considered of principle if the decision could impact a larger group of residents/citizens, involves large amounts, pertains to the interpretation of the law, involves EU legal matters, or has significant public interest.

The case will also be referred to the National Tax Tribunal if it arises from the same issue, meaning that the decision could affect multiple taxpayers, such as a company and its main shareholder.

It is essential to keep in mind that the National Tax Tribunal or Local Tax Appeals Board can only address the points raised in the complaint. Pitfalls may arise if the complaint does not cover enough aspects of the case.

Additionally, the taxpayer should consider whether the case could be reopened by the tax authorities, instead of appealing to the Tax Appeals Agency. This can save time because cases submitted to the Appeals Agency generally have long processing times.

There is also the possibility of requesting the reopening of decisions made by a Local Tax Appeals Board or the National Tax Tribunal. This can occur in cases, where new information has emerged, that would have resulted in a significantly different outcome if it had been known at the time of the decision.

However, the deadlines set forth the Tax Administration Act must be adhered to, according to sections 26 and 27. If the taxpayer brings the case before the courts, they can withdraw their complaint and request a reopening with the Local Tax Appeals Board, regardless of the aforementioned deadlines.

It is also possible to recover 50% of costs, whether the case is won or lost. If the taxpayer receives full or majority support in the decision, all costs associated with the case by law will be covered. Companies can also receive cost recovery. However, it is not possible to deduct costs from taxable income if those costs are covered under the cost recovery rules.

1.2 The Danish Tax Agency's Options in Tax Cases

While taxpayers now have only one appeal opportunity, the Danish Tax Agency retains the right to pursue the case twice. Thus, the agency has an extra lifeline, creating an imbalance in legal protection within the tax system, which has recently been heavily criticised.

The Tax Agency retains the right to refer a decision made by the National Tax Tribunal or a Local Tax Appeals Board to the National Tax Board. However, this only applies in cases whose decision is considered "illegal" and contradicts regulations or established practice. While not all cases can be referred, there still remains a legal imbalance.

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2. SkatteInform’s Comments

SkatteInform is pleased that taxpayers can request that their appeals be handled by either the National Tax Tribunal or a Local Tax Appeals Board.

We recommend considering reopening a flawed tax assessment before filing an appeal with the Local Tax Appeals Board. Reopening cases may be relevant if new information has come to light that the Tax Agency was unaware of, or if the Tax Agency is believed to have made an incorrect decision.

However, we find it problematic that new rules create an imbalance in legal protection. There have been examples of this imbalance, such as reopening deadlines. Previously, the tax authorities had a longer reopening deadline than taxpayers. This imbalance was eliminated, as it was deemed inappropriate for the parties to have different deadlines. Therefore, it seems strange to reintroduce rules, that give the parties different terms. For now, we can only encourage the elimination of this disparity.

We provide qualified, expert answers to your tax questions. If you are interested, we are happy to assist with appeals. We can guide you through the administrative system. In most cases, it is a wise investment to have an advisor help with an appeal. This could prove even more important when, the new rules come into effect. Under the new rules, citizens have only one attempt before the courts.

Call us at 33 32 10 10 or send us an email at info@skatteinform.dk.

Disclaimer

The above information is for guidance purposes only, and we accept no responsibility for decisions made based on this information without prior individual advice. We accept no responsibility for errors or omissions.

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