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Home page // On-account corporation tax 2nd installment: Pay attention to the residual tax surcharge
If the company does not make a voluntary payment, any remaining tax will be added to a ...
October 25, 2023

On-account corporation tax 2nd installment: Pay attention to the residual tax surcharge

Companies can pay voluntary tax on account if, for example, the ordinary tax on account is set too low. The second installment of tax on account for the income year 2023 must be paid no later than 20 November 2023.

The residual tax rates for 2023 are not yet available, so we use the rates from 2022 as a starting point. However, with rising interest rates, there is a risk that the rates will be higher than in 2022.

If the company does not make a voluntary payment, a residual tax will be added with interest, which is expected to amount to 4.4%. The interest is not deductible. This corresponds to an interest rate of approximately 5.6% before tax.

When does it pay to pay residual tax?

Whether it makes sense to make voluntary contributions before or after November 20, 2023 depends on the return on liquidity in the intervening period.

If the company has deposits in the bank or if the company's loan interest rate is below 5.6%, it will generally be advantageous to make a voluntary payment. If the opposite is the case, it is best to wait until the payment deadline of November 20, 2023.

Banks now pay interest on deposits, but their rates are probably lower than the interest supplement given by the tax authorities, so it may be an advantage to pay the remaining tax before November 20, 2023. However, it must be assessed whether it is better to pay in connection with the 3rd installment.             

As a starting point, tax on account paid by November 20, 2023 will be reduced by a percentage deduction. The percentage deduction is expected to amount to 0.1%.

Voluntary payment of the 3rd installment

Voluntary payment of the 3rd installment can be made in the period 21 November 2023 - 1 February 2024. Here, an expected interest surcharge of 0.9% must be paid.

With a surcharge of 0.9%, an interest surcharge of DKK 900 will be calculated for a deposit of e.g. DKK 100,000. This means that if the residual (expected) tax amounts to DKK 100,000, DKK 100,900 must be paid.

How to pay voluntary tax on account

Remember that a voluntary payment must be created via TastSelv Erhverv before the payment is made - otherwise the Tax Agency will return the payment.

How to pay the residual tax:

  • Log in to TastSelv Erhverv
  • Click on Tax in the menu
  • Click Corporate tax in the menu
  • Click on Tax on account
  • Click Report/Change next to the rate you want to change
  • Report how much the company wants to pay in tax on account
  • Pay via the tax account via the payment line found in the overview under Tax on account

Reduction of ordinary tax on account

If the company's tax on account due for payment on November 20, 2023 is set too high, the company has the option to reduce the rate in TastSelv Erhverv. The reduction must be made no later than the day of the payment deadline.

More information

If you have any questions or would like advice and guidance on the residual tax in your company, you are welcome to contact inforevision's tax department. You can read more about us here.

Flemming Saabye
Head of the tax department
T: 39 53 50 38
fsa@inforevision.dk

Jannik Petersen
Tax advisor
T: 39 53 50 47
jpe@inforevision.dk

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