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- The Business Scheme
The Business Scheme
To run business personally or through a company?
If you are self-employed or are you considering starting a business, it may be valuable for you to consider whether you want to run the business personally or through a company.
Self-employed people can choose from 3 types of taxation:
The Business Tax Scheme (Virksomhedsordningen)
The Return on Capital Scheme (Kapitalafkastordningen)
Individual Tax Law (Personskatteloven)
You can also choose to run the business through a company.
You can save money by choosing the right tax scheme.
We provide advice for establishing companies. Contact us for details.
You can read more about the advantages and disadvantages of The Business Scheme versus the limited company form here.
Conditions and Accounting Requirements for The Business Scheme
First and foremost, you must be self-employed in order to apply the business scheme. In addition, there are a number of accounting requirements that you must be able to fulfill, as we have described in this article.
The Business Scheme Can Prevent You from Entering the Top Tax Bracket
You can smooth out your income over several years so that your total payment of top tax rate can be reduced. This is done by leaving all or part of the profits in the business scheme against a payment of a provisional tax of 22%. In this way, there is a kind of equality between the taxation of self-employed business' and limited companies.
The Business Scheme Can Give You a Deduction on Interest Expenses in the Top Tax Bracket
With the business scheme, your interest rates have a deduction value of up to 56.5% instead of 33.6%, and you can save your money in your business and avoid top bracket-tax.