Content is loading
Skip to main content

Issues with our Tax Services

During the spring of 2020, we identified insufficiencies in internal processes supporting the tax services we offer customers with securities in their custody accounts. Consequently, we initiated a thorough review to uncover all potential issues.

Some of the issues may cause customer detriment because they may result in incorrect tax treatment of returns on securities or delays in services. Most of the customers affected are customers of Danske Bank in Denmark, the remainder being customers with Danske Bank in the other Nordic countries.

We are fully committed to solving the issues and ensuring that we provide our customers with correct tax treatment of their securities. In case an issue will result in a direct loss for the individual customer, we will of course compensate the customer.

Types of issues

The issues identified so far fall into three categories:

  • Delays and errors in our processes for tax-reclaim and relief-at-source services
  • Reporting errors due to system limitations
  • Potential tax benefit errors due to inadequate cross-border controls

Delays and errors in our processes for tax-reclaim and relief-at-source services

We have identified insufficient processes in our reclaim and relief-at-source services related to our handling of returns on foreign securities on behalf of our customers. This has caused errors in tax services rendered to our customers and delays in our processing of tax claims, such as delays in transferring tax repayments for US securities.

    • We have previously identified delays in our tax reclaim service related to foreign securities that affect 2,900 customers. Around 2,000 of these customers are entitled to compensation, and we have, as expected, completed the compensation payments except for special cases, which will be handled as part of daily operations.

    • For our 2,400 customers affected by delayed tax repayments for US securities, we have, as expected, also completed the compensation payments, except for special cases which will be handled as part of daily operations.

    • Previously, we have identified that customer documentation in relation to our Relief-at-Source was insufficient. Up to 450 affected customers were informed about the issue, and we are in the process to gather the relevant documentation.

    • We have completed a thorough review in order to uncover other potential issues. As a result, we have identified a small number of cases, where we have made errors when registering the tax service agreement with our customers. The affected customers will be informed and compensated. 

Reporting errors due to system limitations

We have identified limitations to the systems supporting our tax services that have caused errors. Investigations so far have shown that in some cases incorrect dividend declaration codes have been applied to some customers’ custody accounts potentially resulting in unjustified tax benefits. In addition, we have identified minor discrepancies in returns on US securities paid out to customers as a result of incorrect exchange rates being applied by the systems.
  • We have contacted 90 business customers potentially affected by the use of incorrect dividend declaration codes. Further analysis has shown that six of the customers were affected by this issue, and they have all been informed about it. We have implemented procedures and controls to ensure proper application of the dividend declaration codes.

Potential tax benefit errors due to inadequate cross-border controls

We have identified inadequate controls when delivering tax services to customers who move from one country to another and thus from one tax jurisdiction to another. The inadequate control can lead to incorrect tax benefits being applied. Furthermore, has there been potential insufficient clarity around our cross-border services towards holdings being traded outside the market, where the traded company is located.
    • Based on our investigation across all markets, we can conclude that incorrect processing of customers moving between tax jurisdictions has not taken place. We have thus closed the issue.

    • Following our investigation, we conclude that the controls for cross-border holdings have not been inadequate. We will inform relevant customers in order to further clarify where we can provide service in these instances.


  • 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.

Want to know more?