Denmark’s Ekstra Bladet published a report yesterday in which it claimed that Iceland’s Kaupthing Bank has created an international tax shelter scheme for itself and its clients. This is reported in all the main media.
Under the alleged scheme, money is transferred between countries to avoid paying taxes in Denmark and elsewhere. The paper notes that the actions are, however, within the framework of the law. Revenues from investments are transferred to Luxembourg and from there through a complex network to various places worldwide, including Russia and the Virgin Islands.
Ekstra Bladet has planned a series of reports on the large-scale investments made by Icelandic investors in Denmark, Sweden and the UK in the past several years. It quotes wealthy Danish lawyer Jeff Galmond, cited as a key player in the Icelanders’ investments, as saying that the Icelandic investors are not violating the law, but are adept at utilizing legal loopholes and other opportunities in battles with their competitors.
Sigurdur Einarsson, acting chairman of the board of Kaupthing Bank, and Jón Ásgeir Jóhannesson, CEO of Baugur Group, one of Iceland’s major overseas investors, say the paper’s claims are unfounded.
Einarsson denies Galmond has ever worked for KB Bank. Jóhannesson says that the paper is making a proverbial mountain out of a molehill, and that the paper’s journalists came to Iceland last summer and received answers to all their questions.
Gudmundur Ólafsson, a lecturer at the Business and Economics Department at the University of Iceland, stated that the paper’s report is questionable and that many of its claims are incorrect. He also said that he expects the paper will eventually reveal who its sources are.