In an attempt to strengthen tax control, the Danish Parliament has given the Danish Tax Agency the opportunity to develop new tools that can be used in tax control.
The Danish Parliament has adopted a bill from the Minister of Taxation with the subheading "Register interconnection for the purpose of system development and the exercise of authority and expanded access to the eSkatData scheme etc." The new rules will enter into force as of January 1, 2022.
The background to the law
The government has wanted a significant strengthening of tax control, including the development of new and up-to-date methods that will ensure a more efficient and targeted exercise of authority in the Ministry of Taxation.
The Ministry of Taxation has assessed that the possibility of linking data could target, support and streamline the control of whether taxes and duties are paid correctly. In the opinion of the Ministry of Taxation, the alternative would be a manual review of the individual citizens' and companies' tax and duty conditions. In the IT society we live in today and with the systems and possibilities for interconnecting systems that already exist, it seems like a stretch to consider a manual review of tax returns etc. as an alternative to this new tool.
There is already an interconnection of registers today, and this will not change. But in addition to interconnection, all the information reported about citizens' circumstances will be used to create new systems that actually aim to monitor citizens to identify those who fall outside the norm.
It is believed that by making the control more data-driven and intelligent, the subsequent manual control can be achieved to a greater extent without unnecessary inconvenience for the majority of
citizens and businesses who pay taxes and duties correctly.
The Ministry of Taxation believes that by using IT systems and combining data, it will be possible to quickly and efficiently identify the citizens and companies that, based on the existing patterns in the data, are most likely to intend to circumvent the rules, and it will also be possible to identify the citizens and companies that are most at risk of making errors.
More surveillance
Most taxpayers are certainly of the opinion that we should all pay the tax we are obliged to pay. And of course there must be tax control, as a minority, for various reasons, do not pay the tax they are obliged to pay. It's no different to the police carrying out speed checks, as not everyone "remembers" the speed limits.
But how wide should the authorities be allowed to go - is this a step too far?
The government believes that the prerequisite for such data-driven and intelligent control is that the tax administration can collect and process information for system development. In the
the Minister's own words, this means for purposes other than those for which the data was originally collected.
How does it harmonize with the General Data Protection Regulation? Yes, it has been found that it harmonizes well.
The tax administration must, when necessary, be able to process personal data for purposes other than those for which the data was originally collected, regardless of whether there is
compatibility between these purposes and the purpose for which they are used in the administration's development of new digital tools.
It is fair to ask who should assess whether it is necessary? It is the same authority. So why do we need a data protection law? The answer to that question is not entirely clear!
The comments to the bill state that the control is not expected to be significantly different with the new legal authority, as the Tax Administration already today to a certain extent uses the opportunity to combine data for the Tax Administration's exercise of authority.
The new systems will contribute to a higher hit rate and more efficient use of resources when selecting citizens and companies for a subsequent inspection.
If it's not significantly different, isn't the "intervention" a bit harsh?
It must be up to the individual to assess. All we can say is that the new rules give the authorities an even greater opportunity to "monitor" citizens/taxpayers in this country.