Denmark's Tax Authority Loses Landmark Cum-Ex Case

Denmark's tax agency, SKAT, suffered a heavy defeat in its high-profile legal battle concerning cum-ex tax fraud. A London court rejected their claims against financier Sanjay Shah and his defunct hedge fund Solo Capital, marking a significant setback in Denmark's pursuit to recover billions lost to these schemes.

Judge Andrew Baker ruled that SKAT's claims were invalid under Danish law, citing their internal controls as severely lacking. He further noted that Shah, who has been vigorously pursued by the Danish authorities and extradited from Dubai, was not guilty of misleading SKAT between 2012 and 2015.

The ruling is seen as an 'overwhelming victory' for Shah and a major obstacle for SKAT, which plans to appeal. The case highlights ongoing global challenges in addressing tax loopholes, especially post the 2008 financial crisis. Meanwhile, a separate U.S. ruling recently favored SKAT with a $500 million award over cum-ex trades.