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BUSINESS

Danish shipping giant Maersk ‘lobbied’ to be excluded from global tax deal

The Danish shipping giant Maersk held meetings with Denmark's tax and maritime authorities to advise them on how best to shield the shipping industry from the OECD's global minimum tax deal, according to a Danish media report.

Danish shipping giant Maersk 'lobbied' to be excluded from global tax deal
Shipping giant Maersk may have lobbied to be excluded from a global tax deal according to reports in Denmark. File photo: Amr Abdallah Dalsh/Reuters/Ritzau Scanpix

The revelations, reported by broadcaster DR, come as the company on Wednesday reported record profits of 203 billion kroner, on which it paid just 3 percent in tax. 

They are particularly damaging to the company because of the claim last year from Maersk’s then CEO Søren Skou that his company was open to paying more tax, so long as it was through a global agreement via the OECD, precisely the sort of agreement the company was behind the scenes trying to exclude itself from. 

“It seems as if Maersk is playing a double game,” Lars Koch from the poverty charity Oxfam, told DR after he was presented with the evidence. 

“We can see from the access to documents the number of meetings and close and confidential dialogue”, he added. “Here they agree and inform each other about what Denmark should argue in these international negotiations on a tax agreement and they work actively to safeguard Maersk’s interests by exempting the shipping companies.” 

The broadcaster report was based on internal documents obtained from the Ministry of Taxation and the Danish Maritime Authority. 

The documents show that in June 2020, representatives of the company held a meeting with the Ministry of Taxation in which they they discussed strategies on excluding shipping from the OECD agreement on minimum tax. 

Soon afterwards, the industry lobby group Danish Shipping (Danske Rederier), where Maersk plays a leading role, wrote to the Ministry of Taxation and the Danish Maritime Authority warning that the OECD proposal “creates considerable uncertainty in our hinterland”.

Then in June 2021, a representative from ​the Danish Maritime Authority thanked Danish Shipping for supplying it with arguments it could use to push for shipping to be excluded, saying, “it was extremely well done. A thousand thanks for your efforts.”

Finally, when shipping was exempted from the OECD agreement in July 2021, a representative from Danish Shipping thanked the Danish Maritime Authority for “the orientation and for being aware of the special challenges of shipping”. 

Mette Mellemgaard Jakobsen, Maersk’s head of tax, admitted that her company had tried to influence the process.

“We were specifically concerned about how these rules would be implemented, and we had a concrete concern that it would create an increased distortion of competition,” she told DR. 

“For us, it is absolutely crucial that we are not put at a disadvantage compared to other shipping companies around the world. That is why global agreements are the most important thing for us.”

Rasmus Corlin Christensen, a researcher in international tax at Copenhagen Business School, said that Maersk’s double game was quite “striking”.

“On the one hand, you support and work for global solutions, the shipping industry included. But at the same time you can see that, at least when it comes to the global reforms that have been discussed in recent years, they did not want the shipping industry to be covered.” 

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ECONOMY

IN DATA: Danish incomes rise faster than any time in the last 30 years

The average income earned in Denmark shot up by 6.3 percent in 2023, the largest annual rise in earnings recorded since the early 1990s. We break down the numbers.

IN DATA: Danish incomes rise faster than any time in the last 30 years

The average pre-tax income in Denmark rose to 395,500 kroner in 2023, a 6.3 percent rise on the average in 2022, and the highest year-on-year percentage rise in real incomes seen in the country in 30 years.

The sharp rise was driven primarily by income from investments, with shares and funds which performed poorly in 2022 bouncing back strongly in 2023, leading to a near-doubling in the earnings booked by many Danes. 

"The high increase in the average total income per person before tax in 2023 must be seen in the light of an extremely good year on the financial markets," Statistics Denmark wrote in a press release. The average pre-tax income from assets shot up 77 percent to 24,600 kroner in 2023, after the disappointing 29 percent decline in investment earnings received on average in 2022. 

Income from salaries rose a very solid 4.1 percent, with the average pre-tax salary rising by 10,100 kroner to 255,900 kroner. Income from small businesses rose 3.8 percent from 265,500 kroner to 275,500 kroner, while income for the self-employed was flat compared to 2022 at an average of 18,600 kroner. 

"It's hardly surprising that income is rising on average," Brian Friis Helmer, a private economist at Arbejdernes Landsbank, said in a comment. "Employment rose by more than 30,000 last year, and wages in the private sector, in particular, rose noticeably. With more Danes in work and more in the salary bag, it raises the average income." 

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