As a company owner, it is essential to know how and when to complete your tax return form (formerly known as the tax return) and file your tax accounts. However, as with so much else when it comes to the Danish Tax Agency, navigating the specific rules and requirements for company tax returns can feel like a jungle for many—and that is far from ideal.
Primarily because uncertainty regarding the tax return form often leads to worry and sleepless nights. Furthermore, it can end up being a costly affair if you miss deadlines or make errors in your tax return.
In this blog post, we will help you get a much better understanding of the rules and requirements for company tax returns, ensuring you end up paying the correct corporate tax.
What is the tax return form for companies?
The tax return form is the new name for the "corporate tax return." Just like the old tax return, the tax return form is a statement of your company's tax accounts and contains essential information about the company's finances.
In the tax return form, you must, among other things, inform the Danish Tax Agency of your company's income for the year as well as its profit/loss. This information forms the basis for calculating corporate tax and therefore determines whether you will ultimately have to pay residual tax or receive a tax refund.
As a company owner, it is your own responsibility to report the company's figures on the tax return form to the Danish Tax Agency on time for the relevant income year.
This ensures that the company complies with current tax regulations and avoids fines or other consequences.
What information does the Danish Tax Agency require in the tax return form for companies?
It can be a great advantage to research in advance exactly what accounting information the Danish Tax Agency requires from you, as you risk daily fines if you fail to complete the form with all your information on time.
The first thing you should get a firm handle on is which reporting class your company belongs to, as this is crucial for the scope of your tax return form. As a company owner, you will typically fall under reporting class B. You can read more about all rules and requirements for reporting class B here.
In reporting class B, you must—in addition to preparing an annual report —also fulfill more requirements for the company's tax return form than if you were a business owner under reporting class A. You can read more about the tax return form for sole proprietorships here.
The following information must be provided in the tax return form:
- Profit or loss for the year
- Interest income or expenses
- Inventories
- Financial figures from the income statement and balance sheet
- Controlled transactions
- Exemption from financial reporting requirements
- Auditor assistance
The above are the official requirements, which cannot be waived unless the company has a turnover of less than DKK 500,000. If the turnover is less than DKK 500,000, you only need to enter the controlled transactions and the profit or loss for the year.
In addition, there are extra requirements regarding any changes to the tax accounts. This could, for example, be your chosen financial year or joint taxation status, which only needs to be stated if relevant. You can read more about the reporting requirements here.
How should the tax return form for companies be submitted?
The company's tax return form must be submitted via TastSelv Erhverv on the Danish Tax Agency's website.
This must be done once a year for the most recent income year and can be done at the same time as you submit your annual report.
There are four steps you need to complete in TastSelv Erhverv when filling out your tax return:
- Fill in the relevant information about your company.
- Report taxable income and any losses from the previous financial year.
- Report the closing loss from the current and previous years.
- Check that your company information is correct and view the preliminary tax calculation.
When is the deadline for filing the tax return?
As a general rule for company owners, the tax return must be filed 6 months after the end of the financial year.
Most companies follow the calendar year from January 1 to December 31, making the deadline June 30. However, some companies operate with a split financial year, so you should pay extra attention to this.
If you miss the deadline for filing your tax return, you will be charged a tax penalty of DKK 400 for each day the deadline is exceeded. The tax penalty is capped at a maximum of DKK 10,000 in total.
Tax return for holding companies
Holding companies operate differently than operating companies and are therefore subject to different rules. A holding company does not produce anything itself, but instead owns shares or stocks in operating companies. Therefore, a separate tax return must be prepared for your holding company.
If the holding company is part of a joint taxation scheme with an operating company, the holding company must report field 076 for the operating company. Otherwise, both companies must file their own separate tax returns. As a general rule, companies must be jointly taxed if one company owns more than 50% of the other.
You can read more about tax in holding companies here.
Reportability can help your company complete its tax return
There are many different components to consider when preparing your tax return (formerly known as the "corporate tax return"), and it can be time-consuming and very confusing.
That is why we at Reportability have a tool that can help you with your annual report and tax return in an average of 30 minutes. Our online tool guides you through 5 steps where you answer various questions regarding your company's finances and bookkeeping. Before you know it, you will have a complete annual report for the company, ready to be submitted to the Danish Business Authority, as well as a complete overview of the figures you need to enter into your tax return.
Create a free account today if you would rather spend your time and energy on things other than annual reports and tax returns.
