A filmmaker and a crooked lawyer shattered Denmark's self-image

Black Swan was a big deal, but this article massively overstates the average Dane's faith in the system. The welfare state is certainly not reverred as a religion, and the current state of it is always a hot discussion topic with pulls in either direction.

Unlike what this article suggests, tax fraud is also relatively common (one would have to be rather daft to assume that a country with such absurdly high taxation did not have tax evasion as a key pastime - although probably not as aggressively as in places like the US), and while heavily frowned upon certainly not seen as the highest form of crime as this article suggests. Well, maybe if you ask the tax agency and the political parties pushing for ever more welfare, both of which push heavily for a cashless society where all financial transactions are fully trackable by them, but I think most would place tax evasion quite far down on the list of significant crimes.

I would instead say that the average Dane is carefree about these issues, not because they are trusting or believe their system is worth religious following, but because the issues experienced there feels quite minor compared to what seems to happen elsewhere in the world. When your concept of a significant natural disaster is a flooded basement, you tend to not worry that much about what happens locally.

> one would have to be rather daft to assume that a country with such absurdly high taxation did not have tax evasion as a key pastime - although probably not as aggressively as in places like the US

The US has lower taxes so by your logic we would have less evasion. Unless you’re making a judgement on Americans.

I think the common perception is that Americans are more ideologically committed to tax avoidance whereas Europeans are more viscerally tempted by tax evasion?

This isn't true and sounds like something written by terminally online reddit libertarians.

The Black Swan documentary is primarily about sleazy private sector actors in Denmark. The only remotely state affiliated individuals in the documentary is a business man who was a former small city council member and a bankruptcy lawyer who has previously contracted for Danish government organizations. The system worked fine and the Danish equivalent of the FBI, the NSK, already had ongoing cases of investigations into a lot of the uncovered material.

The only "common" tax fraud in Denmark is when a house needs some minor fixing before being put on sale. Many Danish people will pay their friend's friend to do it for them "under the table" and not as formally contracted and taxed work. This is becoming increasingly harder.

However this is far from the massive systemic corruption in many other countries.

Sweden (and I assume Denmark) has a lot of tax-dodging[1] (just like any other country). The tax code is complex (but not nearly US-complex) and gives plenty of ways to avoid paying tax[2].

But at least the tax agency seems quite keen on investigating abuses. I remember Klarna has to pay a huge fine for trying because of trying to abuse tax loopholes a few years ago.

[1] I define tax dodging as using legal tax loopholes in order to pay less tax. A lot of those tax rules are not even complicated, they were just set up with a specific type of person in mind to let them pay less tax.

[2] The most popular ones that middle class Swedes use are delaying paying property capital gains, 30% tax deduction on loan interest payments, special rules for private pension and using ISK investment accounts (which allow you to avoid capital gains). None of them are illegal, just heavily favor some demographics. It is not that hard for a upper middle class Swede to avoid the maximum 56% income tax rate and the 30% capital gains tax.

> one would have to be rather daft to assume that a country with such absurdly high taxation did not have tax evasion as a key pastime - although probably not as aggressively as in places like the US

I think there is a distinction between avoidance (typically considered legal) and evasion (fraud and illegal). Everyone should practice avoidance, using the system as designed. IME, evasion is much higher in countries with say a VAT than the US. Paying cash for transactions, even rather large ones, is common in order to avoid 10-20%+ VAT.

I am making a judgement on the US corporate culture and population within it, yes. It has far more loopholes that remain open and actively used than Denmark does.

Denmark does its very best to make it either a pain in the arse or impossible to use company property in any way that could be seen as having private value. Did you drive home in your company car? Then get ready to be privately taxed of its full market value and for the company to get a bill for the VAT. Did you take a private phone call on a company phone? Then you have to pay the "free phone" tax and the company VAT of the phone. Did you buy furniture for your home office, but without having the home office locked to physically separate it from your regular home, or did you put a comfortable chair in there so it its private value becomes ambiguous? Not a valid company purchase.

Weird US tricks like getting paid in stock and taking loans with that stock as collateral, with the resulting liability cancelling out remaining tax also don't work there. The common stuff would be, say, restaurant owners inexplicably having really low private food expenditure, or really low revenue on paper for how popular the place is.

I suspect the reason is that the US government has pressure from lobbyists to maintain the status quo, while the DK government has pressure to claw in taxes to cover their sky high spending ambitions.

Or when a restaurant owner inexplexably has really low private food expenditure, or has really low revenue on paper despite being relatively popular, or small companies having a lot of company dinners, or labor workers having a lot of company places to go in their company porsche SUV, or...

The reason regular salaried employees do this less, limited to the kind of sort arbejde ("under the table" labor) you describe is because it has become obscenely difficult to do anything meaningful with sorte penge (untaxed money) - not because people don't want to do more or didn't previously do it.

Money that is not required to be paid cannot be called a tax. Taxes are not voluntary. Things like tax avoidance don't even exist, by definition of the word.

There is a third category: tax avoidance by abusing loopholes in the system. While legal, it's not about using the system as designed. I find it morally equivalent to illegal tax evasion. Behavior like that erodes trust in the system and makes the society worse.

What would you call going out of your way to buy cigarettes in a lower tax jurisdiction? The word avoidance seems pretty fitting here. Taxes are as voluntary as the activity being taxed

Not being an American I've always had similar impressions. That taxes in USA are hated way more than anywhere else.

There are three categories: tax minimisation (structuring legitimately to minimise tax), tax avoidance (structuring legitimately but artificially to avoid taxes) and tax evasion (lying to evade tax).

Tax minimisation is fine. Tax avoidance is, in sensible countries, not illegal but ineffective: tax avoidance arrangements are void for tax purposes. Tax evasion is a serious crime.

Avoidance is not using the system as it was designed. It is using the system as it was not intended, creating totally artificial structures just for tax reasons. In a sensible society the taxman can just say "clearly artificial so I will ignore this" and if you disagree, well, see you in court.

Presumanly is tax evasion if you buy them elsewhere then import them into your country without paying the required import duties.

Seems to me salaried workers would be a category that is more conscientious by self-selection. They are comfortable working within the rules of a system and less willing to take risks such as by violating those rules.

How about vacationing in a country that has a lower VAT because hotels and everything are cheaper?

> Weird US tricks like getting paid in stock and taking loans with that stock as collateral, with the resulting liability cancelling out remaining tax also don't work there.

That's not how the U.S. trick works, it's taking loans with the stock as collateral in order to defer realizing the capital gains while still being able to spend the money. It's no different from just taking out an unsecured loan, it's just that banks are more willing to give you a larger balance/less usurious rates if it's secured by something.

VAT is a consumption tax. If you consume goods in a place with lower consumption taxes then the tax is doing exactly what it is meant to do.

If you buy consumer goods in a low-VAT place but transport them to a high-VAT place and consume them, then that is clearly illegitimate for the same reason that it is legitimate for VAT to be applied to imports and refunded to exporters.

I would call that an economic decision, or an opportunistic one. How can you avoid something that's not even there?

Yeah, but that there is such a distinction is a little sad. The use of companies for tax avoidance can also lead to some prejudice against small companies in general, which is unfair to those playing nice.

Within EU, you have free movement of goods, and the VAT is generally paid in the country of sale, not in the country of of the consumer. There are a few exceptions to this, and other regions might have other trade agreements.

Within the EU definition, VAT taxes the company making the sale for the increase in value of a product through the processes the companies and distributors applied to it, and is not a taxation of the receipt of said value.

There is nothing illegitimate about then consuming the product in a different country. It just doesn't happen to send money to your own country's treasury.