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Issues with our tax services

During the spring of 2020, we identified insufficiencies in our processes related to two of the tax services offered to some of our custody account customers.

Following the identification of these issues, we initiated a thorough review of the tax services to ensure that we uncovered other possible issues. In this review, we have identified a number of additional potential issues – seven of which involve potential customer detriment. The issues relate to potentially incorrect pay-outs to customers, including differences in dividend payments, potentially incorrect tax benefits applied, and potentially incorrect tax reclaims.

So far, the review indicates that the issues mainly affect customers who own foreign shares placed in a custody account in Denmark and who have been using our tax services in relation to double-taxation on foreign securities. So far, the review also indicates that the issues are primarily a result of the inability of our systems and manual controls to adequately process the increased complexity of the tax regulations in the various countries in which our tax services have been used. 

Our current early estimate indicate that up to 6,000 customers may be affected by one or more of these additional issues. 

We have stopped these issues and implemented short-term solutions to ensure that none of the significant issues will affect customers going forward. Our focus is now on getting the complete overview of impact on customers and ensure that all affected customers are compensated.

Customers affected and information to them

Two issues are being remediated that relate to delays in paying dividend tax, which we identified during spring 2020. It relates to repayments on some US securities to customers in the period from 2015 to 2019. It affects around 2,400 of our customers across the Nordic countries and Luxembourg, the vast majority in Denmark. The second issue relates to delays in our tax reclaim service, affecting around 2,900 of our customers, mainly customers holding a custody account in Denmark.

Numbers updated 15 September 2021


Delays in tax repayments for US securities


Around 2,400* customers estimated to be affected
*increase by 200 additional customers on the basis of additional analysis

Around 2,350 customers informed about potentially being affected




Tax repayments transferred to around 2,300 customers

Delays in tax reclaim services


Around 2,900 customers affected**Reduced by 400 customers in May on the basis of updated analysis.

Tax reclaims handled for 2,900 customers affected

Compensation expected to be paid in H2 2021

Timeline

  • We submit written response to the Danish Financial Supervisory Authorities information about potential other issues in our tax services.
    Read response

  • In April 2021, we inform customers who have been affected by delays in our tax reclaim service. Also in April 2021, we completed our handling of the backlog of outstanding reclaims.
  • In January 2021, we begin to inform customers who may not have received the dividend tax repayments on US securities to which they are entitled.

  • In August 2020, we begin identifying which customers who have not received the dividend tax repayments on US securities to which they are entitled. Also in August 2020, we begin processing the backlog of outstanding reclaims.

  • As part of a review of the operating model in our Tax Services unit, we identify issues with our processes for dividend tax reclaims as well as dividend tax repayments from the US tax authorities. We update our processes to prevent such issues from reoccurring.

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