Before establishing abroad, it is normal in some countries to pay a larger cash deposit / disbursement, however, it is worth examining the rules first.
It can be dangerous to transmit cash across borders – even if it is your company’s money that is being used for new activities abroad. The National Tax Court has recently settled a case in which a person was stopped at customs on his way to Poland with € 62,500 (DKK 465,625). As the trade in Poland wasn’t fulfilled, the money was deposited in a Polish bank, that later transferred the money to the company’s account in Denmark.
Nevertheless, the person was taxed on the money, as SKAT (Tax Authorities) had a presumption that the funds were untaxed. According to practice, SKAT (Tax Authorities) will furthermore give a tax fine, which depending on the individual’s tax situation could be between 1/3 of the tax and up to almost double the tax that should have been paid. Therefore, it is a big risky to be taken with cash that one cannot document is already taxed or originates from a loan.
If you can document that the cash originates from a loan abroad, you will receive a fine of 25% of what exceeds the legal cash travel amount of 10,000 Euros, corresponding to DKK 75,000. It is therefore vital to remember to declare large amounts of cash both on entry and exit.
Contact the law firm if you have problems with SKAT (Tax Authorities) or find out how to avoid similar problems.
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