Panama Papers: Denmark buys leaked data to use in tax evasion inquiries

Denmark pays up to £1m for documents from anonymous source and plans to investigate up to 600 Danes who may have evaded tax

Denmark has become the first country in the world to apparently buy data from the Panama Papers leak, and now plans to investigate whether 500-600 Danes who feature in the offshore archive may have evaded tax.

Denmark’s tax minister, Karsten Lauritzen, said he will pay up to DKK9m (£1m) for the information, which comes from the Panamanian law firm Mossack Fonseca. He said an anonymous source approached the Danish government over the summer.

The source sent over an initial sample of documents and the government reviewed them. After concluding they were genuine, it secretly negotiated support for the controversial deal from political parties in parliament, the minister said.

“Everything suggests that it is useful information. We owe it to all Danish taxpayers who faithfully pay their taxes,” Lauritzen said, admitting that he had originally been “very wary”. He added: “The material contains relevant and valid information about several hundred Danish taxpayers.”

Danish officials said the cash hasn’t yet been paid. “It’s not a complete deal yet,” one said. The minister wouldn’t reveal the precise sum but said it was a “single digit million” amount – between one and nine million kroner (£115,000-£1m).

The Panama Papers, published in April, were the biggest leak in history. The archive includes 12.7m documents. There are details of offshore companies – half of them incorporated in the British Virgin Islands, a UK tax haven – as well as of secret “beneficial owners”.

An anonymous source, “John Doe”, gave the archive to the German newspaper Süddeutsche Zeitung. An international consortium of journalists from 180 media organisations including the Guardian examined the leaked files, which feature several heads of state and politicians.

It is unclear if John Doe is the same source who sold information to the Danes. Süddeutsche Zeitung said it wouldn’t speculate. Lauritzen said he did not know who the source was. The government communicated with him – or her – via encrypted channels, he said, after being put in touch by a tax authority in another country.

This raises the prospect that other European countries may discreetly be buying data on their own citizens. In 2014, German tax officials paid about €1m (£850,000) for files from a much smaller Mossack Fonseca leak. They carried out raids on customers of Commerzbank who were suspected of evading tax.

Tax authorities from around the world including HM Revenue and Customs asked journalists earlier this year to give them access to the Panama Papers archive. All approaches were declined. DR, Denmark’s state broadcasting corporation, turned down a request from the country’s rightwing liberal government.

The government had already started an investigation into eight Danish banks. A preliminary report said the banks had not done enough to ensure offshore accounts were not used for money laundering or tax evasion. The authorities also asked police to investigate whether Nordea Bank, with 11 million customers, had complied with anti-money laundering directives.

This is a historic moment for Denmark and the first time it has chosen to buy information on suspected tax offenders. Dennis Flydtkjær, an MP with the Danish People’s party and a tax rapporteur, said that he was sceptical about the deal but that “in this case we can be prepared to bend our principles”.

He told Politiken newspaper that the country was losing billions to tax evasion and that it was a scandal. He declared: “This is a golden opportunity to show that we are actually going after people who cheat.”

Jim Sørensen, a divisional tax chief, said the leaked files gave a useful overview of tax evasion and involved about 320 Danish cases.

“The source sent us a ‘sample’, which we got people to study over the summer holidays. This convinced us of the quality of the documents. They are real and they contain information that is very relevant to us,” he said.

He added: “They are about specific individuals. They also provide super-interesting information about the methods used by advisors and intermediaries. They can give us a breakthrough in the investigation of tax havens.”

Sørensen said the source had “selected and sifted” the material before turning it over to the government. “We have the impression that the source has extremely good insight into everything the press writes in Denmark, and is very well informed about what is going on,” he said.