Even if we consider the Nordic countries as being part of the same legal traditions, there is a great difference between the Tax Procedure Law and the level of penalties. On Wednesday 4 December 2013, PwC Luxembourg organised an event aimed at providing a tax update for Nordic countries, including Sweden, Denmark and Norway. More than 60 participants attended this conference.

Starting the New Year with a clean slate

All Swedish citizens owning assets and earning revenues abroad must submit a fiscal declaration in Sweden. In case of delay, it is still possible to compile a voluntary income disclosure within the five years following a declaration.

“In the best case scenario, Swedish nationals receive a tax amnesty, provided that their declaration is complete. If, on the contrary, the declared information turns out to be incorrect, the ensuing penalties are considerable, engendering, in some cases, legal prosecutions”, explains Håkan Behmer, Private Wealth Management partner at PwC Luxembourg.

As for Denmark, the country boasting the highest tax rate out of all OECD member states, there is no specific tax regiment for expatriates in place. In case of delay, emigrants are granted an additional ten years to resolve outstanding tax matters. The Danish Tax Administration (SKAT) imposes fines of between 4.5% and 7% of the income tax as well as additional costs amounting to between 0.4% and 0.8% per month.

“The sanctions vary depending on the cases: was it premeditated tax evasion or mere negligence? Other factors also come into play, such as the concealed amount and whether or not there has been voluntary disclosure,” says Jørgen Rønning Pedersen, partner at PwC Denmark. “Thus, for an outstanding sum of DKK 238,900, the fine consists of DKK200,000 in case of negligence and double that amount in case of evasion.”

In Norway, which is not part of the European Union, expatriates have to declare any revenues earned abroad. Besides income tax, this also includes a tax on net worth (‘fortune tax’).

Tax authorities have up to ten years to revaluate the fiscal situation of an individual. In case of any fraud, a fine of between 30% and 60% of the outstanding sum is issued. Note that in Norway, fiscal fraud is punishable by incarceration.

Norway and Luxembourg have signed a tax agreement aimed at avoiding double taxation and at countering tax evasion in terms of both income and fortune tax. Following this treaty, the kingdom has intensified its control efforts. The risk of concealing assets or income from abroad is unconceivable.

“The proposed fiscal amnesty is a golden opportunity for any person guilty of tax evasion to come clean. It allows them to avoid surtaxes and conviction,” resumes Dag Saltnes, partner at PwC Norway.