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The impact of the Government's aid package in tax area

The impact of the Government's aid package in tax area

The Government has initiated its first aid package so far to mitigate the negative effects of COVID-19. This includes a bill on the temporary postponement of payment deadlines for withheld A-tax and labour market contributions as well as temporary postponement of filing and payment deadlines for VAT etc.

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Today, a bill was proposed to temporarily postpone payment deadlines for withheld A-tax and labour market contributions as well as temporarily postpone filing and payment deadlines for VAT etc.

The plan is to adopt the bill within a few days.

The purpose of the bill is to give the corporate sector a cash injection by temporarily postponing companies' payment deadlines for A-tax, labour market contributions and VAT. This way, companies will have the money at their disposal for a longer period.

The bill does not apply to the Faroe Islands and Greenland. 

Temporary postponement of payment deadlines for withheld A-tax and labour market contributions

The companies' payment deadline for withheld A-tax and labour market contributions is proposed to be temporarily postponed to the effect that as from April 2020 until and including June 2020, the payment deadlines for withheld A-tax and labour market contributions are postponed, so the A-tax and the labour market contribution withheld for these months will not be due until four months later than usual.

The bill does not include any changes to the filing deadlines for withheld A-tax and labour market contributions.

Only the corporate sector is covered by the postponement of payment deadlines – i.e. not public institutions etc. subject to withholding duty.

The payment deadline for A-Tax and labour market contributions for April, May and June is postponed by 4 months.

COVID-19

Temporary postponement of deadlines for filing and payment of VAT

For companies settling VAT on a monthly basis (large companies), the settlement period is proposed postponed by one month, with a filing deadline on 25th of the second month after the end of the tax period for the tax periods running from March 2020 until and including May 2020.

The payment deadline for companies settling on a monthly basis is postponed by 30 days for March, April and May. 

COVID-19

Postponing the filing deadline for companies settling on a monthly basis will not postpone the Danish Tax Administration's deadline for paying negative VAT liability to the companies. Thus, if companies' VAT liability for the tax period is negative, they may, as with the current rules, report the negative VAT liability to the Danish Tax Administration at the end of the tax period. This way companies are refunded the excess VAT no later than 3 weeks after the Danish Tax Administration's receipt of the VAT return in accordance with s. 12 (2) of the Danish Collection Act.

It is currently being investigated whether the VAT periods for small and medium-sized companies can also be postponed.

Amount limit for credit balance in Skattekonto temporarily raised

The current limit of DKK 200,000 for companies' tax account balance (Skattekonto) is proposed increased to DKK 10 million. The new amount limit will apply until and including 30 November 2020. Companies will have access to adjust and set the amount limit in their tax account; however, maximum amount will be DKK 10 million, and it will not be available before 25 March 2020 at the earliest. 

Do you want to know more?

If you have any questions to the above, you are more than welcome to contact our experts:

Partner in Corporate Tax Peter Rose Bjare 

Partner in Indirect Taxes Flemming Lind Johannsen

Director in Mobility & People Services Pernille Paisen 

© 2020 KPMG Acor Tax, a Danish limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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