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Wednesday, May 22, 2024

More taxpayers reveal hidden fortunes

Nearly 300 more Norwegians reported formerly hidden taxable fortunes to tax authorities last year, double the number the year before. They collectively sat on taxable net worth valued at NOK 7 billion and took advantage of a tax amnesty program that can reduce or eliminate punitive tax in addition to tax owed.

“The danger of getting caught (with undeclared taxable fortunes and income) has never been greater than it is today,” state tax director Hans Christian Holte told TV2. He attributed the increase in the number of people revealing overseas holdings to the fear of being caught. Punishment for such tax evasion can include tax owed plus a high punitive tax and possibly a jail sentence.

Mostly Swiss bank accounts
A total of 295 people reported taxable bank accounts and other assets abroad, held in countries including Great Britain, the US, Luxembourg and Switzerland. The vast majority, 143, reported having bank accounts in Switzerland, which has long had a banking system famed for its secrecy. It was most recently in the news because of charges filed against the Swiss operations of British bank HSBC (formerly Hong Kong & Shanghai Banking Corp) for allegedly helping customers avoid taxes in their home countries.

HSBC officials in London have told the International Consortium of Investigative Journalists (ICIJ) that it has since made “fundamental changes” over the past six years, since a former employee took and later leaked copies of computer files with sensitive financial data on 107,181 HSBC customers. HSBC now claims it has taken steps to prevent its services being used to avoid tax or launder money.

Newspaper Aftenposten reported this week that among the accounts in HSBC’s Swiss files were 111 accounts tied to people in Norway. Collectively the accounts contained the equivalent of NOK 2.8 billion (USD 373 million at current exchange rates). Among those on the customer lists were real estate investors, brokers, shipowners and heirs.

‘Began innocently’
“This all began rather innocently,” one of the HSBC customers, a man in his 40s living in western Norway, told Aftenposten. He and his father, who has been described by newspaper Dagens Næringsliv (DN) as one of Norway’s wealthiest men, had around NOK 75 million in an HSBC account. The son told Aftenposten that they’d been offered good terms on currency trading “and suddenly we had a sum that would have been liable to a lot of tax.” Then they were urged to place more money in the bank but later reported it all to Norwegian tax authorities. They have since paid back taxes and punitive taxes and now pay fortune tax every year.

Another Norwegian customer was a man in his 70s who had earned a fortune in the fishing industry. He had around NOK 3 million, money that he said came from the sale of a home in France. Another 18 of the Norwegian customers had taken advantage of HSBC’s offer to never send any correspondence regarding their accounts to them in Norway. They had a total of NOK 132 million in secret accounts.

Aftenposten noted that much of the money held in accounts tied to Norwegians was legally and openly placed, and tied to investment funds or companies. Others had opened the accounts after living or working abroad while others still haven’t revealed the accounts to tax authorities.

French authorities, who gained access to the accounts through the former HSBC employee, offered to share them with other countries as early as 2010. Norwegian authorities didn’t ask for the files but after an inquiry from the finance ministry following Aftenposten’s stories this week, they now intend to do so. Berglund



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