Danish funds with $370b warn managers on taxes

Bloomberg

Pension funds in Denmark have issued a warning to external managers, making clear that they risk being fired if caught engaging in aggressive tax
optimisation.
The move represents an industry wide measure intended to thwart tax avoidance and live up to the United Nation’s Sustainable Development goals. A total of 11 firms, representing over half of Denmark’s pension assets, have now committed to a tax code of conduct that targets unlisted investments.
“We expect our collaboration on responsible tax practices to strengthen our dialogue with external managers and thereby contribute to avoiding aggressive tax planning and at the same time promote fiscal transparency in investments,” the funds said in a statement on Monday.

“It is our hope that our common principles will evolve into an actual industry standard.”
The measure comes as governments increasingly take action against aggressive tax planning, following a string of scandals in which state coffers were emptied of public revenue. In Denmark alone, a scam exploiting dividend tax rebates defrauded the state of about $2 billion, while Germany is currently investigating similar crimes in a much larger case.
Danish lawmakers proposed in November that the country adopt the European Union’s Anti-Avoidance Directives.