Reimbursement of expenses for assistance with appeals

Reimbursement of expenses incurred from expert assistance

Persons, deceased persons, corporations, foundations, companies and certain associations and institutions (hereinafter referred to collectively as Taxpayer) may, if they appeal against a decision in tax, customs or tax matters, recover their expenses for expert assistance (reimbursement of costs) incurred as a result of the relevant appeal.

If the appeal is upheld to a large extent, the taxpayer will be reimbursed for all expenses. In all other cases, the taxpayer may be required settle for paying half of the expenses.

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1. Which cases?

You can be reimbursed costs for the expenses of an accountant and a lawyer, when you appeal decisions to the following authorities:

• The Danish Tax Appeals Agency
• The National Tax Board
• The Courts

2. How much does the public sector cover?

The taxpayer’s appeal must be largely upheld in order to be able to recover all expenses incurred from expert assistance (100%).

If the appeal is not predominantly upheld, taxpayers will still be able to receive reimbursement for half (50%) of all expenses incurred for expert assistance. Should the taxpayer lose the entire case i.e. no support at all, taxpayers can also be covered 50%.

The table below shows how much of the expenditure is covered by the government.

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When determining whether the taxpayer received agreement with the majority of the complaints, the authorities first assess the amount. However, the authorities can also stress that some grievances are more principled than others.

3. Example of the Tax Agency's increase in the taxpayer's income

The Tax Agency increases the Taxpayer's income by the following amounts:

Taxation of a free car DKK 40,000 plus omitted revenue DKK 50,000.

If the taxpayer complains against the entire increase of DKK 90,000, and only agrees that the Taxpayer should not have been be taxed on the free car for DKK 40,000, the taxpayer will only be able to recover half (50%) of the cost of expert assistance because the taxpayer has not been granted the majority agreement.

If an advisor had advised the taxpayer not to appeal against the item regarding forgotten turnover of DKK 50,000 before the complaint was submitted, and appealed against the free car at DKK 40,000, the taxpayer would be able to cover all the costs of expert assistance (100%).

The above example illustrates that it is important to assess which points are likely to be accepted before submitting a case.

4. Practical approach

When the taxpayer receives the invoice from their advisor for assistance in a tax matters before a decision is made, the taxpayer may apply for up-front cost reimbursement.

The bill may look like this:

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At the same time, your advisor applies to the Tax Agency for a reimbursement of DKK 5,000.

The taxpayer signs a statement that the amount can be paid directly to your advisor.

Therefore, the taxpayer only has to pay half of the bill in the first place.

If the taxpayer receives agreement for the majority of the complaint, your advisor will apply for reimbursement for the remaining DKK 5,000. In this case, the taxpayer will not incur expenses for conducting the case.

If the taxpayer is registered for VAT and the complaint relates to a company, the taxpayer may deduct the VAT from the company. For this reason, VAT registered taxpayers cannot also be reimbursed for VAT costs.

5. Conclusion

If the Taxpayer appeals against the Tax Agency's decision and the majority of the appeals are upheld, the taxpayer will be able to recover all the costs of expert assistance.

However, it is important that the taxpayer carefully considers, which points of a decision will most likely receive agreement. Following this consideration, they should decide what should be appealed.

6. Contact Us

You are always welcome to contact us for a non-binding meeting if you would like a preliminary assessment of a tax case.

• We will make a qualified assessment of the possibility of appealing and winning the tax case.

• We will outline the pros and cons of conducting the case so, that you can decide whether or not to pursue the case.

Whether you have a minor tax issue or want an assessment of a major tax case, we are available to provide you with qualified advice.

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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