Business scheme can give you top rate tax deductions on interest expenses

1. Tax value of business interest expense

There is also the possibility of tax savings here and now through the use of the enterprise scheme. One of them is due to the tax value of the company's interest expenses.

The tax value of interest expense amounts to about 56.5% using VSO (if you have income above the top tax threshold). If you do not use VSO, the tax value of interest deductions is down to only about 33.6%. Thus, this is a tax saving of typically 22.9%. If you have interest expenses of DKK 100,000, your tax savings will be up to DKK 22,900 when using VSO.

2. You can deduct interest on private debt in the corporate scheme to a certain extent

It is legal to put private debt into the corporate scheme and thus obtain a deduction for interest on the debt in personal income. However, some tools have been incorporated into the legislation that, in certain situations, are supposed to “neutralize” the value of this speculation.

If too much private debt is added into the enterprise scheme you will not be able to save in the company scheme. In addition, you may run the risk of having to factor in a so-called “interest correction” in your personal income, see the section on negative deposit account.

As long as you stay within the statutory limits, the tax saving will still be up to 22.9% of interest on debt included in the corporate scheme, see above.

It is only important that the corporate scheme is applied correctly and that private debt is also properly and appropriately incorporated into the corporate scheme.

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

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