A holding company is defined as a limited liability company that primarily owns shares in other companies. The companies that are owned by a holding company is called operating companies. A holding company in Denmark can be structured in the form of, e.g. an ApS or an A/S. A sole proprietorship cannot be a holding company. Usually, a holding company is not registered for VAT, and there is really no other activities than just managing the ownership of other companies. It is not relevant how many shares the holding company own in other companies in order to be considered a holding company but tax rules will differ greatly depending on how many shares a holding company own.
When you sell a product or service to a client, you always need to issue either a normal invoice, a simplified invoice or a receipt. In this blog, we describe what the rules are.
If you sell products or certain services to consumers in the EU, where VAT is settled in the buyer’s country of residence, then from 1.7.2021, you can declare and pay the VAT in the new system called “Moms One Stop Shop”. This is smart since you only have to declare and pay the VAT for all EU countries in one place.
The business tax scheme is a particular tax scheme in Denmark you can use as a sole proprietor to lower or postpone your income tax. The business tax scheme enables you to use the company income tax rate (which is 22% in 2021) on the part of the profit from your sole proprietorship not withdrawn from the business to your private bank account.
If you are the director and or shareholder of a Danish limited liability company – either an ApS, IVS or A/S – then you will need to approve the annual report for the company once per year at the annual general meeting.
In this blog, we will explain how you can open a company bank account in Denmark for your company. It is getting very hard for companies to get a company bank account in Denmark but there is a way to get started.
Learn how to convert your sole proprietorship to ApS in our blog here. There can be many reasons why you would want to convert your sole proprietorship to ApS. Very often it relates to the wish of having limited liability or tax considerations.
The government has decided to discontinue the limited liability company structure called IVS. It means that you have to convert your IVS to ApS. The deadline for this conversion is October 15, 2021. Read how to convert your IVS to ApS here.
What is the risk for you and your client if it turns out you are an employee and not a freelancer or self-employed (sole proprietor)? Well, first of all, your client could face both a tax bill (since he should have withheld your personal income tax) and fines for not complying with legislation (f.ex. not providing you with a proper employment contract, breach of the Danish holiday act, termination periods etc.).
In general, you can say, that just because you issue an invoice through an LTD for your consulting services, that does not necessarily make it a company income. In some circumstances, you might have just put yourself at risk of double or even triple taxation.
We have made a guide for you here that shows how to scan your invoices to e-conomic using the e-conomic app. It is very helpful for us when you scan your invoices since we can store all invoices digitally inside e-conomic.
Shareholder loans can be anything from payments done using the company credit card to pay for a private cost on behalf of a shareholder, to salary advances paid to a shareholder when a payslip has not yet been made, dividends that are distributed without complying with the Companies Act or actual loans issued to the shareholder. According to the Companies Act, then a shareholder loan can be legal. However, if the loan is issued to a shareholder (a physical person, not a company), then it will be taxed regardless of being legal or not.
GDPR is a European Union law that requires businesses operating in the EU to justify how certain data is collected and used. Failure to comply with GDPR can profoundly affect a business, including very large fines.
For the year 2019, it has been decided that ALL majority shareholders in Denmark must submit an Excel-sheet together with their personal income tax declaration (oplysningsskema) on SKAT Borger. You are the majority shareholder, when you have a controlling influence in a company (f.ex. when you own an ApS, IVS or A/S). If you own more than half of the shares in your company, then you are a majority shareholder. The deadline for submitting the appendix for controlled transactions is: 1.9.2020. The appendix is an Excel sheet prepared by the Danish Tax Office.
The government has announced a new compensation aid package, that will make it possible to get the VAT paid on 2.3.2020 repaid. The VAT will be refunded as an interest free loan. The loan is…
We have made a guide for your here, if you want to apply for compensation as a small business owner, or a sole trader, as a result of the Coronavirus/COVID-19 crisis. This compensation package is…
We have made a guide here, showing you how to apply for salary compensation in relation to the Coronavirus/COVID-19 crisis. First, you need to log in to the government “VIRK” website – you can click…
The government will compensate up to 75% of the loss of sales for small companies, that has seen a loss of sales of more than 30%. The compensation will be maximum 23.000 DKK per month. The government will compensate 25-80% of the fixed costs.
The payment term for employee taxes is postponed 4 months. The payment term for B-tax is postponed. The payment term for VAT is postponed. Remember that you can still change the payment of company income tax.
The compensation option for salaries relates to companies, that otherwise would be in a situation where they would have to terminate at least 30% of all their employees or more than 50 employees. So for our clients, the 30% rule will be most relevant.
We figured out the key challenges companies will face at the end of 2020 and also looked at how your UK business could benefit from relocating to Denmark.
After your new ApS is incorporated, then there are 4 important steps to follow. If we incorporated the ApS for you, then we will assist you getting these 4 steps done correctly.
Almost every person that has ever tried to start their own company, knows the fear of running out of money. When you have a company, the technical term for that, is to go “bankrupt” – or to be declared “bankrupt”. The whole process leading up to being bankrupt, we call the bankruptcy proceedings. This blog only explains the bankruptcy proceedings for limited liability companies in Denmark (IVS, ApS and A/S).
There are 5 important types of closures and proceedings to know:
1: Voluntary liquidation (decided by the shareholders)
2: Compulsory dissolution (ordered by the court)
3: Restructuring
4: Bankruptcy (petition filed by the company or a creditor)
5: Liquidation using a statement from the shareholders (decided by the shareholders)
Watch our instructional video here on how to make a cash report (in Danish: “kasserapport”). A cash report is required by law in Denmark, if your company receives cash from its clients. It is normally shops, restaurants, café and similar types of companies.
Here you can read more about the fees that relate to the incorporation of a new ApS in Denmark.
Limited liability companies in Denmark pay company income tax on their taxable profits. The company income tax in Denmark is 22% for limited liability companies (2021). After the company income tax is paid, the company can choose to distribute the remaining profits as dividends to the shareholders. The dividend tax is 0%, 27% or 42% when paid to the shareholders (2021) depending on how much dividend that is distributed and to who. Holding companies does not pay dividend tax in Denmark, when they own 10% or more of the company.
There are two different kinds of depreciation: one relates to accounting principles and the other to the tax law. This is the law we must follow when we make your tax declaration, in which a specific set of rules dictate how we calculate depreciation and your taxable income.
Dania Accounting provides accounting services, payroll services, and other services to corporate clients based in Denmark. We ensure your accounting remain efficient, accurate, streamlined and compliant. We work together with most of the major audit firms in Denmark (Martinsen, EY, KPMG, PwC, Beierholm).
To determine whether or not you can deduct transportation costs from your home to your company in your personal taxable income (this type of deduction is called “befordringsfradrag” in danish), then you need to calculate the total amount of kilometers that you drive every day from your home to your company and back. If the roundtrip exceeds 24 kilometer per day, you are normally eligible for a tax deduction.
A van used for transporting goods for your business may be eligible for deductions, but the rules are different, depending upon if you purchase or lease the vehicle.
First off, in order to deduct your home office in your personal income tax, you must change the physical appearance of the office. The tax office in Denmark will ask what you have in this home office. For example, if you have a three-room apartment and you use one of the rooms for a home office, in order to receive a deduction, it must be physically changed. If the office’s physical appearance has not changed, you cannot take a deduction.
A cash report is not to be confused with the sales report that you print from the register. The report involves documenting how much cash you had in the morning and the evening – basically, how much money that went in and came out of the cash register.
This article will cover how we actually pay the VAT, and if you qualify, how you retrieve a VAT refund from the tax office.
There are a few different ways to submit your invoices for booking. We always recommend scanning your invoices and submitting them directly to your accounting system, either by using an app or by mailing them directly to the accounting system.
Before we can make payrolls and salaries for the first time for your employees, your company must be registered to have employees. In Danish this type of registration is called “arbejdsgiverregistrering”. It is an additional registration, to an already existing VAT registration. You can check on the tax office website SKAT Erhverv, if your company is registered as an employer. If you are not registered as an employer, we can help you with this.
In this blog, we describe what information we need to incorporate a new ApS in Denmark. An “ApS” is a Danish limited liability company structure.
When you hire an employee in Denmark and negotiate their salary, you’ll always be negotiating a gross salary, not a net salary. A gross salary is the amount paid to the individual by an employer, before any deductions are taken, while a net salary is the residual amount following deductions, which include payroll taxes.
Many of Dania Accounting’s clients ask whether or not they actually need an auditor to audit their annual report. In most cases, the answer is no. We’ll briefly explain why by outlining the audit rules for sole proprietorships, limited liability companies, and holding companies.
This guide explains the process of how to start and register a sole proprietorship in Denmark – also sometimes called a “one-man company” or a “one-person company”.
Dania Accounting provides quality service to both small and large companies, including accounting and payroll services, VAT declarations, tax returns, annual reports and budgets.
The ApS is a specific type of limited liability company in Denmark. As the owner of an ApS, you are not personally liable for the debts and obligations of the company. Here you can read more about incorporating a new ApS.
Your payments relating to B-tax, which comes from the expected revenue in the sole proprietorship, will be split into 10 installments. Payments are to be made on the 20th of each month from January to May, with no taxes to be paid in June, and then payments again from July to November, with no tax due in December.
When you need to choose what type of company you want to incorporate in Denmark, the first question you should ask yourself, is whether or not you prefer to run the business where you are personally liable, or if you prefer to place the liability in a structure, known as a limited liability company.
If you are looking to partner up with an accountant in Copenhagen, then we specialise in outsourcing of accounting and have our focus on traditional accounting services like Financial accounting, Managerial accounting, Cost accounting, Tax accounting, Payroll accounting, and preparation for external auditing. We can handle either all or part of your accounting.
Our accountants work in e-conomic, SAP, Microsoft Dynamics NAV and Microsoft Dynamics 365 Business Central. We also daily use many integrations - like PLEO, EazyProjects, Ibistic, Likvido, FarPay, LeverandørService, Budget123, and more.
Our clients range from large international corporations, to smaller and medium-sized Danish companies. We have experience of working with 1500+ clients. All of our accountants speak English on a business level and are used to service our international clients. You can book an online meeting here on the website, or meet us at our office in Copenhagen.
