News about interest on VAT corrections and the tax account payout limit in Denmark

On June 9th, 2022, the Danish Parliament approved a change in the withholding tax law, the collection law, and the corporation tax law. It was agreed that interest must accrue on VAT if there is a correction to the return.

The principle behind this is that the government does not want companies that make false declarations to be financially better off than companies that make correct declarations.

In the future interest payments should only be avoided if the company has declared correctly and paid on time. If this is not the case, an interest surcharge is levied so that interest and compound interest are payable from the time when the amount should have been declared correctly. The interest rate in question is currently 8.4% per annum.

The interest surcharge applies to all adjustments, no matter if it is made on the initiative of the tax administration or the company itself.

This is an important change in the area of VAT in Denmark, where interest was previously not part of VAT adjustments.

Further details on the regulations will be determined by the Ministry of Finance and we do not yet know all the details, including whether the effective date for adjustments will be before June 15th or 31st of December 2022.

The second change, relevant to companies with VAT registrations in Denmark, is, that on June 15th the maximum payout limit on the tax account will be 200.000 DKK. This means that any amount in the tax account exceeding 200.000 DKK will be paid out to the company’s NemKonto.

This means that The Danish Tax authorities require that all companies must have a NemKonto for tax refunds.

Read more about how to set up the Nemkonto.