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A company is free to choose whether to pay voluntary tax on account in both March and November...
February 16, 2021

Company tax on account for 2021

By 20 March 2021 at the latest, companies must pay the first installment of the ordinary tax on account for the 2021 income year. It is important to decide whether the company will pay voluntarily or whether the ordinary installment should be reduced.

A company is free to choose whether it wants to pay voluntary tax on account in both March and November or only in one of these months. In addition, the company can make a so-called 3rd voluntary payment no later than February 1, 2022.

Be aware of interest surcharges for tax on account

However, be aware of the interest surcharge. Normally it is credited on voluntary payments in March, whereas it must be paid on voluntary payments in both November and February next year.

However, in 2020, the surcharge for deposits in March/November was 0%, while the surcharge for the voluntary deposit in February was 0.9%. We don't know the interest rates for 2021 yet.

When is voluntary payment of tax on account an advantage?

Whether it would be beneficial for a company to make a voluntary payment and if so, when, depends on an individual assessment, but it is probably not beneficial to pay before March 20. Instead, you can wait until November 2021 to make a decision.

Remember to set up the voluntary payment in TastSelv Erhverv before the actual payment is made.

Negative interest on bank deposits

If the company pays negative interest on deposits in its own bank, there will be an advantage in paying tax on account in March 2021 if the interest surcharge for March 2021 remains unchanged at 0%.

Reduction of the ordinary tax on account

The rates can be reduced if the company expects the corporation tax for 2021 to be significantly lower than the calculated tax on account. The deadline for reducing the tax on account is March 20, 2021 (the payment deadline), and this is done via TastSelv Erhverv.

Additional information

If you have any questions about companies' voluntary payment of tax on account, you are welcome to contact inforevision'stax department. Read more about us here.

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

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