DENMARK: COVID-19 VAT IMPLICATIONS

Apr 3, 2020 | COVID-19

DENMARK– Update 23rd April

Denmark delays VAT reporting and payments for coronavirus

 

Small tax payers may request refund of VAT paid on 2 March 2020 deadline for 2019 VAT periods may now apply for an interest-free loan of the VAT paid. Any refund is then repayable by 1 April 2021. Tax payers entitled to the scheme are:

  • Turnover below DKK 5m
  • Turnover between DKK 5m and DKK 50m

Denmark will also temporarily postpone by one month payment deadlines of VAT for companies above DKK50 million turnover. This will be applied as follows:

  • The deadline of 27 April will be moved to 26 May
  • The deadline of 25 May will be moved to 25 June
  • The deadline of 25 June will be moved to 27 July

 

Source Credit – Richard Asquith (Avalara) 

DENMARK– Update 22nd April

COVID-19: Interest-free VAT “loans” to certain companies

The new measures concern:

  • Company tax account (Skattekontoen): The usual limit of DKK 200,000 for companies’ tax account balance was increased to DKK 10 million on 17 March 2020. With the new measure, the limit ceases to apply during the period from early May 2020 until 1 April 2021. Companies with excess liquidity can indicate an unlimited amount on the company tax account in order to avoid negative interest and at the same time ease the pressure on the public finances.
  • R&D tax credit: It is possible for loss-making companies to receive a tax credit for their research and development (R&D) costs. Usually, the tax credit is paid in November when the final tax for the companies has been assessed. With the new measure, the credit payment is being advanced so that 2019 tax credits will be paid in June 2020 (instead of in November 2020). The monetary limit for eligible R&D costs of DKK 25 million has not been amended.
  • Interest-free VAT and payroll tax “loans” to certain companies: Companies liable for value added tax (VAT) with an annual revenue of less than DKK 5 million that paid VAT for the second half of 2019 at 2 March 2020 and VAT-liable companies with an annual revenue between DKK 5 million and DKK 50 million that paid for Q4 2019 at 2 March 2020 may be refunded their VAT payment as an interest-free loan. Further, VAT-exempted entities subject to payroll tax under the so-called “method 4” (e.g., passenger transport companies, dentists, and doctors) that paid payroll tax for Q1 2020 no later than 15 April 2020 may have the amount of tax returned to them as a “loan,” plus a quarterly share constituting ¼ of the taxable profit for 2019. The loan must be repaid on or before 1 April 2021. There is a condition that to be eligible for this “loan,” the company is not undergoing any restructuring, bankruptcy proceedings, liquidation or forcible settlement. Furthermore, any arrears of taxes owed will be set off against the payment. Companies may request the loan from 4 May until 15 June 2020. In total, the interest-free loans may amount to DKK 35 billion.

 

Source Credit – KPMG

DENMARK– Update 17th April

A temporary one-month suspension of VAT payments for businesses with a turnover higher than DKK 50Million. This applies from the March 2020 tax return to 25th May 2020.

 

Source Credit – Accordance VAT

DENMARK– Update 31st March

  • Possibility of larger deposits on the “tax account”.
  • No negative interest on deposits on the online tax account.
  • Limit for deposits is increased to DKK 10m for the period 25 March to 30 November 2020.
  • Pay-outs can be made in the period by lowering the threshold.
  • Payment deadlines for PAYE Tax, B-income tax and provisional labour market contributions are deferred.
  • VAT credit period is temporarily extended. Extension of the deadline for reporting and payment of VAT: extension period depends on whether VAT is reported on a monthly, quarterly or half year basis.
  • Improved possibilities for reimbursement of wages and/or sickness benefit due to COVID-19 absence.
  • Salary compensation as an alternative to lay off
  • Additional compensation for fixed cost if certain conditions are met.
  • Ordinary deadline for both statutory and corporate income tax return (2019 income year) filling are postponed until 1 September 2020.

Source Link here

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