Account tax and voluntary payment of residual tax for companies

Now is the time again to pay account tax for the companies covered by the account tax scheme.

The ordinary account tax is paid twice a year

The ordinary account tax is paid twice a year in equal instalments. The rates are calculated by SKAT as 50% of the average of income taxes of the past three years minus the largest of the period's dividend tax, if any. This means that the rates for 2020 are calculated on the basis of the income years for 2016, 2017 and 2018.

Account tax is paid or reduced via the Tax Account in Tastselv Erhverv.

The payment deadlines are for both ordinary and voluntary March 20 and November 20, but when the normal deadlines fall on a Sunday, the deadline has been brought forward to the first business day. Companies may pay voluntary account tax on the same dates. In addition, it is also possible to pay voluntary account tax for 2020 no later than February 1, 2021.

Reduction of account tax

If a low income is expected in 2020, the company may request a reduction in the ordinary account tax. Requests for reductions in ordinary account taxes must be made before the payment deadline, March 20 and November 20, respectively.

SKAT may subsequently request the necessary documentation for this. As a starting point, it will be sufficient to refer to the most recent financial information available, including information on deficits from previous years.

Good advice on acontoskat

It is advisable to draw up an estimate of the expected tax payable for the year. If the company has liquidity at its disposal — and in particular companies with back deposits that are paid at negative interest rates, the company can advantageously make voluntary deposits before 20 November 2020.

It may be a good idea to apply for payment of overpaid account tax for 2020, as otherwise the excess tax will not be paid until November 20, 2021.

In case of voluntary deposit in March or November 2020, a surcharge will be accepted, while a surcharge will be payable when depositing in February 2021. These surcharges will not be fixed until the end of the year no later than 15/12 - 2020. The surcharge for the 1st and 2nd tranches for 2019 was 0.0%, whereas the surcharge on the 3rd account tax rate amounted to 0.9%.

The residual tax rate for corporations was 4.7% in 2019. We expect interest rates to be at the same level for 2020. If the company's pre-tax borrowing rate is below 6% p.a., it may be worth paying voluntary residual tax before February 1, 2021 for the financial year 2020.

Reporting and voluntary payment of account tax via tax account

If the company wishes to make a voluntary deposit before November 20, 2020 or before February 1, 2021, this can be done by:

1. The company reports this to the SKAT via TastSelv Erhverv:

• Log in to TastSelv Business
• Click on “Tax return for foundations and corporations etc.”
• Click on “Acontoskat”
• Click “Report/Change” next to the rate you want to change
• Report how much the company wants to pay in voluntary account tax
• (you will now receive a receipt part, with a payment line, to be used when depositing — see point 2 below).

2. The Company may deposit the amount into the Company's tax account no earlier than 5 days before the payment deadline on November 20, 2020 or February 1, 2021. This is done by using the received payment line from the receipt part, as mentioned in paragraph 1 above.

Note in this regard, the payment line is the same for all the company's payments to the tax account at SKAT, and payments to the tax account are therefore also not earmarked, but are used to cover the company's oldest debts according to the tax account.

If the company has other debts that the company has not just been aware of, then the voluntary payment of account tax shall not be effected;, in that there is not enough money in the tax account. This happens even if the company has actually transferred the amount to the tax account. The amount or part of it is simply used to cover other arrears!

We recommend that close and regular monitoring of the tax account at the Skattestyrelsen is kept in order to avoid missing and late payments.

Annual accounts for companies are now on the way

The annual statement of companies for the financial year 2019 should have been received in the companies' digital mailbox during October. Please send a copy of the annual statement to SkatteInform so that we can check whether the annual statement has been prepared correctly.

Payment of any residual tax for 2019 including calculated residual tax surcharge of 4.7% can be made from November 1, 2020, and must be made no later than November 20, 2020

If the Company is to receive excess corporate tax return, the amount will be transferred to the Company's Tax Account for payment on November 20, 2020.

Contact SkatteInform

We provide qualified answers to your tax questions. If you are interested in assistance with the calculation of taxable income, we are happy to provide you with a fee upon further agreement.

Call us by phone 33 32 10 10

Send an email at info@skatteinform.dk

or visit us at www.SkatteInform.com

SkatteInform Statsautoriseret Revisionpartnersselskap

Frederiksborggade 54 1. tv

1360 Copenhagen K

We do not accept responsibility for any dispositions that may be made on the basis of this newsletter without prior individual advice. Likewise, we accept no responsibility for any errors and defects

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