Danish corporate taxpayers are taxed on an annual basis. Corporate taxpayers may choose a tax year that is different from the calendar year.
Tax returns are completed on the basis of financial accounts with adjustments for tax. Tax returns should be filed no later than six months following the end of the accounting year. Corporations with an accounting year-end that falls in the period from 1 March to 31 March must file a tax return no later than 1 September in the same calendar year.
Tax returns must be filed digitally. Companies can file the tax return themselves or grant their auditor/tax advisors access to file the tax return on their behalf.
The tax system, in practice, is based on self-assessment. Tax assessments are made automatically by the tax authorities on the basis of the tax return. However, the tax authorities may subsequently audit the tax return.
CIT must be paid on a current-year basis in two equal instalments due on 20 March and 20 November. The authorities request payments of 50% of the average of the last three years’ final income tax. In addition, voluntary additional payments may be made on the same dates. Companies may make a voluntary additional payment no later than 1 February following the assessment year (i.e. no later than 1 February 2024 for the tax year 2023 and no later than 1 February 2025 for the tax year 2024).
An allowance is granted in case of voluntary payment on 20 March, while voluntary payments on 20 November are subject to an interest charge when set against the final tax bill. Similarly, voluntary additional payments are subject to an additional interest charge based on the interest rate of the underpaid tax for the period 20 November to 1 February.
The reimbursement percentage, supplementary tax percentage, and percentage supplement for the income year are published by the Danish tax authorities no later than December 15 of the income year.
The allowance granted for voluntary payments on 20 March 2023 was 0.9%, and the interest charge for payments on 20 November 2023 was 0.9%. The interest charge for voluntary addition payments no later than 1 February 2024 was 1.5% for the tax year 2023. The allowance and interest rates for 2024 are expected to be published in December 2024.
The final tax bill is settled by 20 November in the year following the income year. Underpaid tax is then payable by 20 November with a surtax of 7.7% of the tax amount (for tax year 2023). Overpaid tax is refunded by November of the following year with interest of 3.6% (for tax year 2023). However, a refund is not granted for overpaid tax that has arisen from the 3rd voluntary payment made no later than 1 February.
The Danish tax system is based on self-assessment. Companies are, in general, subject to audit on a random basis, but some large companies/groups are subject to annual audit by the Danish tax authorities.
The general statute of limitations is 1 May in the fourth calendar year after that of the end of the relevant accounting period. The deadline concerns the tax administration’s notification of making or changing an assessment of income tax. This limitation is extended for another two years with respect to inter-company (transfer pricing) issues and certain tax-exempt restructurings.