Police in Dubai arrested British national Sanjay Shah on Friday

A British national has been arrested by police in Dubai over a £1.3billion ($1.7bn) tax fraud case.

Officers say they plan to extradite the suspect, identified as Sanjay Shah, 52, who is wanted in Denmark over fraud allegations.

Shah was detained after Denmark signed an agreement in March to allow for extradition to and from the United Arab Emirates.

Shah, who has spent the past few years living in Dubai, has maintained his innocence.

He is accused of fraud relating to foreign businesses pretending to own shares in Danish companies – then claiming tax refunds for which they were not eligible, according to a statement from Dubai police Brigadier General, Jamal Al Jallaf.

‘The fraud scheme, known as `cum-ex’ trading, involved submitting thousands of applications to the Danish Treasury on behalf of investors and companies from several countries around the world in order to receive dividend tax refunds,’ Al Jallaf said.

Shah has been sought by prosecutors in Denmark since 2015 after the Danish treasury was cheated out of a ‘staggering amount’ of money, Justice Minister Mattias Tesfaye said.

‘It should not be possible for suspected perpetrators to hide in the Middle East and thus avoid being held accountable in a Danish courtroom,’ he added.

‘Now I am awaiting the legal process in the United Arab Emirates, and crossing my fingers that it will end up that we can get Sanjay Shah on a plane to Denmark, so he can be prosecuted in this country.’

It is not immediately clear whether Shah has a local lawyer and a court date for an extradition hearing has not yet been set.

This is a breaking news story, more to follow soon… Check back shortly for further updates.

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