In light of the development of Corona virus (Covid-19), the Danish government is currently taking measures to assist Danish businesses, who are affected of the overall situation. The measures will need to be formally introduced by law before they are in effect, but the following shows what the main intentions are. Some of the measures will effect the ongoing administration and in particular payroll administration.

Extension on payment deadlines for withholding tax on payroll

Generally withholding tax (A-skat and AM-Bidrag) are payable by the end of the month or the following month on the 10th depending on the definition (large or small) of the company.

For the payments required in April(1), May(2) and June(3) there will be an extension of four months, so they will be payable in August(1), September(2) and October(3) (along with the regular payment for those specific months).

Extension of payment on VAT

For large companies (monthly payments) the payment of VAT is extended by 30 days for the periods March, April and May.

Corporate tax

One of the preliminary payments of corporate tax is due 20th March. The rate should be based on the expected profits of 2020. It is possible to adjust the rate in accordance the expectations to the profit for 2020. If the Corona-virus are effecting your business, this may be a possibility to optimize the cash-flow as well.

Tax account – payout maximum from DKK 200.000 to DKK 10.000.000

Some companies may still want to pay in the withholding tax and or VAT, which will not be possible with the extension on payment deadline. Therefore, the limit for payout from the tax account (“Skattekonto”) will be raised to DKK 10.000.000 until 30th November 2020.

United Tax Network comments

The austerity measures are an effective measure to better the cashflow. However, the administration should make sure to update the payment deadlines for payments in order to benefit from them. However, in the event that payment is made still, the money is likely returned since the payroll reports will facilitate a payment requirement three months later.

Besides the extension of the payment all other reporting requirements and processes should continue without any changes.

If you have any questions or comments, please reach out to us and stay safe!

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Sources

Official news (in Danish)

Faktaark_coronavirus (in Danish)

Slides-fra-pressemoede_10-marts-2020 (in Danish)