Danish Tax Authority and IBM Announce 24 Million Euro, 3-Year Services Agreement

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COPENHAGEN, DENMARK - 11 Dec 2006: The Danish Tax Authority, (SKAT) and IBM (NYSE: IBM) today announced a 24-million euro, 3-year services agreement to modernize SKAT's IT systems. IBM will manage the development, operation and maintenance of a digital account for tax transactions between SKAT and Danish businesses. Also included in the contract is the development and maintenance of a new digital register for motor vehicles. The solutions will be implemented in 2008.

The IBM solution will provide a single electronic tax account in which all tax payments from Danish companies can be made and receipts registered. The account will manage total tax revenue of approximately 102 billion euro a year and serve about half a million Danish businesses.

Companies will be able to access their individual accounts on line and obtain a real time overview of their tax bill on demand. The tax account project is part of the Danish government's action plan, "A simpler everyday life for citizens and businesses."

"The solution will provide SKAT with a better overview of the total involvement we have with each business. Thus we can provide a better service and make the businesses' administration easier, because they will get access to the account according to the principles that we know from homebanking," said Preben Kristiansen, Strategy and Development Director with SKAT.

The second IBM solution is for a Digital Motor Register -- a single system for the electronic registration of motor vehicles containing all relevant information on each vehicle. Currently, vehicle registration is characterized by a low degree of digitalization, several form-based procedures and compulsory appearance in person at the motor registration office. The new solution will provide access for private dealers and vehicle inspection companies to register vehicles and license plates electronically.

Danish citizens buying cars privately will also be able to register vehicles on line.

"The solution ensures that the initial registration and any re-registrations of cars and other vehicles will be swifter and simpler than today, and that citizens will only have to make one simple electronic transaction in connection with the inspection, purchase and sale of vehicles," said Kristiansen.

The system will manage Denmark's 3.5 million vehicles.

Modernization of SKAT's IT systems

The two projects are key to the modernization of SKAT's IT systems portfolio. The aim is to improve efficiencies and provide citizens with improved service, while making it faster, cheaper and more secure for SKAT to scale up for future demands. The new, flexible solutions will allow SKAT to quickly accommodate new or amended tax legislation -- this functionality is being provided in part by IBM's subcontractor RuleBurst, which has specialized in natural language capability to quickly transform and model complex tax legislation.

"We have taken the step towards a more open and flexible service-oriented architecture, and we are happy to collaborate with IBM on this important and necessary modernization of our systems," says Preben Kristiansen, Strategy and Development Director with SKAT.

"Denmark recognizes the benefits of e-government and is once again at the forefront with this innovative modernization project for the Danish Tax Authority," says Preben Thalund Madsen, Country Manager, Global Business Services IBM Denmark. "This initiative will benefit both businesses and Danish citizens by providing improved services and increasing operational efficiency."

The contract was signed on December 8th.

About IBM

For more information, please visit www.ibm.com

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