The initiatives include the following:
- Postponement of payment of A-taxes and AM-taxes
- Postponement of payment of B-taxes
- Postponement of reporting and payment of VAT
- Increase of cash limit on the company’s tax account
Postponement of payment of A- and AM-taxes
A-taxes and AM-taxes (Labor market contribution) are taxes withheld every month by the Danish companies on behalf of its employees.
Small and medium sized companies must report and pay A- and AM-taxes on the 10th day in the month following the taxable month. For large companies the deadline is the last day in the taxable month.
The new rules postpone the deadline for reporting and payment of A- and AM-taxes for April, May and June with 4 months. Please find below an overview of the reporting deadlines in the schedule below:
Taxable period | Small and medium sized companies | Large companies | ||
| Existing deadlines | New deadlines | Existing deadlines | New deadlines |
April 2020 | 11 May | 10 September | 30 April | 31 August |
May 2020 | 10 June | 12 October | 29 May | 30 September |
June 2020 | 11 July | 10 November | 30 June | 30 October |
Postponement of payment of B-taxes
According to the existing rules Self-employed persons has to pay B-income on a monthly basis on the 20th each month except for June and December. The new rules postpone the April payment until 20 June and the Maj payment until 20 December.
Consequently, there are still 10 annual payments but the ones for April and May have been postponed.
It should, furthermore, be stressed that Self-employed persons are able to downgrade their expected profit so that the remaining 7 rates of B-income are reduced.
Postponement of reporting and payment of VAT
LARGE BUSINESSES
Large businesses report VAT on a monthly basis. i.e. businesses with a taxable turnover exceeding DKK 50 million report and pay VAT no later than the 25th in the month following the taxable month. This deadline has now been postponed with 1 month for March, April and May 2020.
SMALL AND MEDIUM SIZED BUSINESSES
The Danish government will propose similar VAT relief rules to smaller businesses reporting VAT on a quarterly or on a bi-annual basis.
Q1 VAT which should have been reported in Junes will be postponed to September 2020.
Businesses reporting VAT bi-annually will file for VAT next time in March 2021 instead of September.
Please find below an overview of the reporting deadlines for VAT:
Taxable period | Small and medium sized companies | |
| Existing deadline | New deadline |
Q1 | 1 June 2020 | 1 September 2020 |
Semi-annual 1 | 1 September 2020 | 1 March 2021 |
Taxable period | Large companies | |
| Existing deadline | New deadline |
March 2020 | 27 April 2020 | 25 May 2020 |
April 2020 | 25 May 2020 | 26 June 2020 |
May 2020 | 25 June 2020 | 27 July 2020 |
The postponement of reporting deadlines is solely related to companies, which are in a payable position. Companies in a receivable position may file the VAT return before the deadline and any receivable VAT will be paid out as usual, i.e. within 3 weeks after the reporting.
Increase of cash limit on the tax account
By default, any tax receivable on the company’s tax account is automatically returned to the tax payer. The tax payer may opt for a delay, whereby receivables will remain on the tax account for an amount of up to DKK 200,000.
Due to the postponement of the payment deadlines for direct and indirect taxes, companies may face negative interests if taxes are kept on the company’s bank account for a longer period.
Therefore, businesses may opt for an increased cash limit on the tax account of up to DKK 10 million.
The increase of cash limit on the tax account is applicable from 25 March 2020 through 30 November 2020. Subsequently, the limit will be DKK 200,000 as usual.
For any tax related questions, please contact our tax experts:
Direct taxes: Jakob Schilder-Knudsen, jak@lundgrens.dk or +45 22474375
Indirect taxes: Mario Fernandez, maf@lundgrens.dk or +45 5361 5859
