Hacker News Reader

Comment by erikegern | Hacker News Reader

It's a loophole in the same way as an unwatched cash register is a loophole.

That is not fair to the subject of the article.

Not only is what the subject of the article did probably not illegal, but also lawmakers will probably choose to eliminate the loophole (i.e., to change the tax code) rather than to make exploiting the loophole illegal in the future.

> Not only is what the subject of the article did probably not illegal

Why do you say that?

The method they used consists of simply filing forms to get withheld taxes paid out that were never withheld. The amounts paid out corresponds to owning all stocks in the actual companies many times over.

Sanjay himself went drinking with the employee of the Danish tax authority in Copenhagen who was in charge of approving the applications while the (I'll go ahead and use the word) fraud was going on, presumably to ensure things would continue to go on[0]. The employee has since been jailed for approving fraudulent applications in another case[1]

American pension funds who similarly exploited this have settled with the danish authorities and returned all the money they received[2]

Sanjay says he suggested a settlement, offering to return 1.9B DKK (~311m USD) in 2018[3]

Yes, the danish authorities were sleeping at the wheel, but that does not make it legal.

[0] https://www.dr.dk/nyheder/webfeature/milliardkuppet

[1] https://www.dr.dk/nyheder/penge/seks-aars-faengsel-til-sven-...

[2] https://www.skm.dk/aktuelt/presse-nyheder/pressemeddelelser/...

[3] https://www.dr.dk/nyheder/penge/sanjay-shah-jeg-tilboed-danm...

Let's hope that they catch all those who did this.

In germany, they are also going to vote a law before christmas that the crime can still be followed up after 10 years in order to bring all of them to court who did this in germany.

This is completely fair to the subject: He got a tax refund for taxes paid for dividends, that he never paid in the first place. This is not a loophole, open to interpretation or in any way anything except plain old fraud.

Now you can fault the authorities for not having better checks in place (I personally blame, in the Danish case, a previous government for firing ~2000 “IRS” employees due to them being unneeded when a new IT system was put in place. Funny thing is the IT system had just been funded, when they were fired), but it is still outright fraud.

In the end I hope this will be a PR win for EU, as we can hopefully agree to heavy sanctions if he is not extradited.

The government can ask you to return the money. How is it a loophole if you end up in debt if you exploit it?

Cum-ex is getting a refund for taxes you never paid on transactions you made purely to get the tax refund. There was no risk at all. Of course it is fraud and illicit, and judges have long confirmed this.

Reply on news.ycombinator.com