Removal of tax account balance maximum and VAT refunding (loan)

Removal of tax account balance maximum and VAT refunding (loan)

In yet another recent effort to secure cashflow amongst Danish corporations additional measures have been agreed under the Ministry of Taxation. The measures will now go through the legislative process. Some of the main, relevant elements within our area are:

Removal of maximum on the tax account

In a recent Covid-19 measure, the maximum balance on the tax account (“Skattekonto”) was raised from DKK 200.000 to DKK 10.000.000, which would make it possible to companies, who are not looking to utilize the postponement of VAT and withholding tax, to still pay in taxes and VAT for a total amount of DKK 10.000.000. For a number of companies, the new limit was not sufficient comparing to how much VAT or withholding tax is payable during the next three months. Also, removal of the limit would likely motivate some companies to pay in additional cash in order to avoid negative interest on their bank account.

The limit is scheduled to be removed in the beginning of May 2020 and will be reinstated on 1st April 2021.

We expect that no actions are necessary to remove the limit. However, if a company pays in excessive cash, which later becomes necessary as working capital, the limit should be reduced in order to reclaim the necessary amount. Amounts, which have been used for payments are not reimbursable.

Payout of VAT as loan

For small and mid-sized companies the recent VAT payment (second half of 2019 or last quarter of 2019) will possible to have repaid as a zero-interest loan. The loan is due for payment on 1st April 2021. It will possible to apply for the loan from 4th May until 15th June 2020.

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