Preventing fraud and error in dividend tax refunds

Introduction

The Danish Tax Authority reduced fraud and errors in dividend tax refund processing by implementing a digital process powered by cBrain’s F2 platform, enhancing quality, efficiency, and oversight in tax refund operations

Case metrics

Key statistics

35,000

claims are processed annually

12.7

billion DKK in estimated fraudulent refunds before 2015

33%

approval rate reduction of claims

The challenge

Addressing fraud and manual processing inefficiencies

The Danish Tax Authority sought to reduce fraud and errors in the processing of dividend tax refunds, particularly in claims from foreign entities holding shares in Danish companies. In August 2015, concerns over fraudulent activity prompted the authority to suspend payments temporarily.

The previous process relied heavily on manual controls and paper-based documentation, increasing the risk of fraudulent claims going undetected. Without digital tracking, inconsistencies were hard to identify, making fraudulent activities more difficult to detect in a timely manner. The absence of real-time monitoring further complicated efforts to ensure accuracy in refund processing.

This lack of automation and standardization made it difficult to validate ownership and detect unusual claim patterns, necessitating a more robust approach.

The solution

A digitized and streamlined tax refund system

The Danish Tax Authority implemented cBrain’s F2 platform, a fully integrated platform designed for government operations.

The solution provided a digital process with end to end case management and quality control, enabling structured workflows and standardized procedures. Fraud detection mechanisms were embedded to analyze claims and validate shareholder entitlements. Integration with legacy tax systems improved efficiency, while real-time dashboards enhanced transparency and operational oversight.

By transitioning to digital processes on a proven and configurable COTS platform, caseworkers could process claims with greater accuracy and efficiency. The new solution provided a structured approach, ensuring that every claim followed a defined process, reducing the likelihood of errors. The implementation was done cost-effective and with high delivery speed, materializing the advantages of COTS software for Government and meeting the customer’s need for swift delivery.

The result

Improved fraud prevention and operational efficiency

With F2, prevention of fraudulent claims was significantly enhanced, with approvals dropping from two-thirds to under half.

Caseworkers now access centralized digital documentation, reducing administrative inefficiencies and focusing on complex case evaluations. The system's configurability ensures adaptability to changing regulations, while real-time monitoring enhances control over tax refund processing.

These improvements strengthen compliance and service quality for legitimate applicants while reinforcing the credibility of the tax authority’s refund processing system.

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