Between 2020 and 2024 the Danish Tax Agency (Skattestyrelsen) opened 12,000 targeted audits on newly registered companies suspected of “chain fraud” – a scheme in which a web of shell firms disappears with the VAT they owe the state.
Nine out of every ten audits uncovered errors or deliberate fraud, the Ministry of Taxation said today. The inspections have already led to DKK 4 billion (≈ € 535 million) in additional tax and VAT demands being issued, and the figure is expected to rise as investigations continue.
Chain fraud typically works like this:
1. A new limited company is set up and obtains a VAT number.
2. The company buys goods or services from another domestic firm that is itself part of the fraud ring.
3. It claims a VAT refund on the fictitious purchase, then sells the same goods on to the next company in the chain at a price that includes VAT.
4. Before the tax is due, the company disappears or files for bankruptcy, leaving the Treasury with an unpaid bill.
The Tax Agency uses advanced risk-scoring models that combine trade-flow data, bank-transaction alerts and cross-border information from Eurofisc and the EU’s “Quick Fixes” network. Companies that score highest are visited first; 90 % of those visits now reveal manipulation or bookkeeping gaps, up from 78 % in the 2016-2019 period.
Police assistance
Since 2022 the Agency’s special unit, SKAT Krimi, has worked hand-in-hand with the National Economic Crime Centre (NSK) and State Prosecutor Lise-Lotte Nilas. Eight organised-crime groups have been dismantled, 34 indictments filed and 11 prison sentences handed down, including a seven-year term in March 2024 for what investigators call Denmark’s largest single carousel fraud (DKK 840 million).
What’s next
The government has earmarked an extra DKK 250 million for fraud analytics in the 2025-2028 finance bill, allowing the Agency to treble the number of real-time transaction checks. A bill now in Parliament will also give banks a legal duty to freeze accounts within 24 hours when the Agency issues a “preservation notice,” closing the window that fraudsters currently use to empty balances.
To conclude
For legitimate start-ups the news is good: the risk-based approach means honest firms are seldom inspected. For would-be fraudsters the message is clear – the 90 % hit-rate shows the odds of getting caught have never been higher.