Bachmann/Partners has incorrect tax assessments reopened extraordinarily
If a taxpayer can present information of a factual or legal nature that may justify an amendment to the tax assessment, the taxpayer will have a legal right to reopening. The deadline for requesting ordinary reopening for a previous income year is 1 May in the fourth year after the end of the income year. This means, for example, that a request for reopening concerning the 2022 income year must be submitted no later than 1 May 2026.
If a taxpayer does not manage to request reopening before the ordinary reopening deadline, an extraordinary reopening may be requested if one of several specific conditions is met.
Bachmann/Partners Law Firm has assisted an elderly man in a case concerning extraordinary reopening of his tax assessments for the income years 2016–2019.
The client had for several years operated a sole proprietorship, which was deregistered for VAT and dissolved in the Central Business Register at the end of 2015. Nevertheless, the tax authorities estimated discretionary profits for the business in the income years 2016–2019, despite the business having been closed — and this was known to the tax authorities themselves.
The client, who had retired, did not respond to the notice of the discretionary assessments, and annual tax statements were therefore issued showing that he had business profits. It was not until 2024 that the client became aware of this. The Danish Tax Agency refused to reopen the assessments, which led the client — with assistance from Bachmann/Partners — to bring the case before the Tax Appeals Board.
The Tax Appeals Board ruled in the client’s favour, finding that “special circumstances” existed which allowed for extraordinary reopening. The Board agreed with Bachmann/Partners that the Danish Tax Agency had not obtained all relevant information — in particular that the business had ceased in 2015, that the client had retired, and that he had withdrawn a significant amount from his retirement savings — all matters we had pointed out.
The client’s taxable income was therefore reduced by approximately DKK 1.5 million. He could now finally enjoy his retirement.
The case is an example of how extraordinary reopening can occur when the tax authorities have not ensured that a case is sufficiently clarified to allow a decision to be made on a correct and complete basis, even if the taxpayer has not responded to inquiries from the authorities.
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