Consequently, there will not be any B-tax payments due in April and May, and there will be no months with double payments since there are no payments due in June and December under the normal rules. Whether the extended payment deadlines should be applied, is subject to a choice by the tax payer.
Furthermore, the March rate for B-tax can be avoided if the individual changes his or her preliminary income assessment and rejects the payment with PBS-service (if the payment is to be made using PBS). The B-tax rate for the month of March has already been formed in the systems of the Danish Business Authority and has been dispatched for payment on 20 March 2020. If, within the next days, the individual makes amendments to the preliminary income statement in order to lower the B-taxes, this will not be reflected in the amount already set for the March rate.
It is important to notice that it is possible for self-employed persons to make amendments to their preliminary income statement for the current fiscal year on www.skat.dk. If, under such circumstances, an individual makes amendments to his or her preliminary income tax statement for the current fiscal year, reflecting that a decreased surplus for 2020 is now expected, new payment forms will automatically be generated to be used by the individual for the remaining payments for 2020.
Agreement concerning wage compensation
On 15 March 2020, the Danish Government and the social partners of the Danish labour market presented the framework for a temporary wage compensation arrangement that is expected to be in force from 9 March until 9 June 2020.
According to the agreement, the Danish Government will, in certain situations, compensate up to 75% of the businesses’ salary liabilities toward their employees per month (a maximum of DKK 23,000 per employee). However, for hourly workers the compensation amounts to 90% per month (a maximum of DKK 26,000 per employee). The arrangement is subject to certain conditions which can be read (in Danish) here.
The bill is yet to be presented in the Danish Parliament. The starting point is that a compensation provided by the Danish State will be tax liable at the level of the businesses. The businesses have a corresponding tax deduction for the wages that are paid to the employees included in the arrangement. In order to support the incentive for the businesses to use the new arrangement and incentive, it should be considered to include tax rules that provide for tax exemption of compensations received.
The website of the Danish Tax Authority
The Danish Tax Authority has set up a separate section on its website where the incentives in the tax area following the outbreak of COVID-19 will be updated regularly. Furthermore, the Danish Tax Agency has opened a hotline.
You can keep yourself updated on the Danish Tax Authority’s website regarding Covid-19 incentives (currently only available in Danish).
Further information can be gained by reaching out to your regular contact person in EY Tax or by contacting:
Lars Andersen, Tax, tel. +45 2529 4654
Søren Næsborg Jensen, Tax, tel. +45 2529 4561
Jacob B. Pedersen, Tax, tel. +45 2529 5018
Mick Jørgensen, Indirect Tax, tel. +45 5122 1643
Jens Wittendorff, International Tax, tel. +45 5158 2820
EY will regularly provide updates regarding COVID-19 and the implications which the current situation may have on your position for tax, VAT, duties, etc. Keep updated here.