Danish Tax Authority Settles $239 Million Civil Fraud Case with U.S. Pension Funds

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Friday, June 7, 2019
Author: 
Bruce Zagaris
Volume: 
35
Issue: 
6
Abstract: 

On May 29, 2019, the Danish Customs and Tax Administration (SKAT) announced that dozens of U.S. pension plans have agreed to a $239 million settlement, concluding litigation over dividend taxes.  According to the settlement, 61 pension plans have agreed to repay tax refunds received in connection with dividends between 2012 and 2015. The settlement is a major achievement in SKAT’s global effort to claw back tax refunds worth $2.8 billion for which Tax Minister Karsten Lauritzen said they had no right. According to Lauritzen, the agreement is for the full amount received by the 61 pension plans. The agreement, the terms of which are confidential, requires the pension funds to make an immediate payment of 950 million Danish kroner (approximately $141 million) and pay the remainder over four years.  The names of the pension funds were not disclosed. An important element of the settlement is that the settling pension plans have agreed to cooperate with SKAT’s remaining cases against 242 other U.S. funds who are continuing to litigate.