Voluntary On Account Tax Payment (acontoskat)

Tax on account taxes for companies are up for payment just around the corner. So if you started a new business or company in 2023; if your business changed significantly from last year, or if you are unsure of whether you have your On Account Taxes (Danish: acontoskat) under control, keep reading! Because Thursday, February 1 is the last deadline for payment of voluntary on account tax for the income year 2023.

What is on account taxes?

On account taxes for Danish companies are paid in two ordinary equally large installments. These are calculated to be 50% of the company’s average corporation tax of the past three years. The 1st and 2nd are considered ordinary installments, and a company may increase or decrease these installments. These two installments can be seen in E-tax for business from February onwards. 

Companies can avoid surcharges on taxes by making a 3rd on account tax payment. But as a potential 3rd installment is voluntary, it needs extra attention and action from the Finance department of the company.

The deadlines for on account taxes are:

  • 1st ordinary installment: March 20, 2023
  • 2nd ordinary installment: November 20, 2023
  • 3rd voluntary/extra installment: February 1, 2024
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Rate of residual tax surcharges

In December, the Danish Tax Agency published the rate of residual tax surcharge for companies for the income year 2023, and the rate of the interest surcharge to be paid as a voluntary payment of on account tax on February 1, 2024. 

The residual tax surcharge for companies for the income year 2023 constitutes 7.7%. This is an increase of 2 percentage points compared to the previous years. This means that if the on account tax paid in the 1st and 2nd installments does not cover the taxable income AND you do not pay the voluntary installment in on February 1, you will be paying a surcharge of 7.7% when receiving your annual tax statement in November. IF you pay the voluntary installment, you will instead be paying a surcharge of 1.5%, based on the current numbers available. 

Note that the surcharge is not tax deductable and it is therefore not beneficial for you to pay too much in the voluntary installment. This is because the normal interest subsidy for excess tax does not apply for the voluntary payment in February.

Who can benefit from making a voluntary payment of estimated tax?

In general, if your company is expecting to pay a residual company tax, you should consider paying a voluntary installment of on account tax. But it always depends on the surcharge and the applicable loan interest. 

Should you need a loan to pay the voluntary installment, it will only be beneficial for you to pay the 3rd voluntary installment, if your loan interest is within certain levels. Should your loan interest for your tax payment be higher than this, you will be better off waiting for the 2nd installment. 

Are you in doubt about whether it will be beneficial for you to pay the 3rd voluntary installment? Do not hesitate to reach out to our mighty admins for a talk!

Possibility of refunding excess estimated tax

Do you anticipate paying more than your annual income tax? Excess amounts can be refunded under specific conditions before the tax assessment is finalized. Requests for refunds must be submitted to the Tax Authority before the deadline for submitting the information return/tax return. So, it must be done no later than June 30, 2024, for the income year 2023.

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At mighty admins, we can assist you with:

Review and calculation of your account taxes for the year to ensure limited surcharges and/or best use of the liquidity of your company.

Preparing an annual wheel of filing and payment deadlines with the local authorities. 

Handling your Corporate Administration from A-Z, so you never have to think about important filing and payment deadlines.

… And much more!

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