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Paper work
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Talking about accounts, most entrepreneurs think of tax accounts even though your banker and others might also be interested in accounts insight. You can also use the accounts to gain an overview of your business operations.
Business Tax Return
Late March or early April all Danish taxpayers receive an income tax form from the tax authorities. Pay earners (and unemployed) receive an "ordinary" income tax form while independent business owners (and certain others) receive an "extended" version.
A significant difference between the two types of income tax form is that the ordinary version need only be completed and returned if the pre-printed figures are incorrect, while the extended version must always be completed and returned.
The term for submission of the extended version is 1 July, i.e. 6 months after the fiscal year end.
Accounts must be kept
From January 1st 2006 you need not send the accounts to the Tax department but it must be kept in your file.
A large number of rules apply to such accounts. These rules cause the accounts to be extremely complex at times and at other times fairly simple.
A large number of rules apply to such accounts. These rules cause the accounts to be extremely complex at times and at other times fairly simple.
In the simplest cases, tax accounts comprise three elements:
- Statement of income and expenses during the calendar year (assessment year) as well as net profit.
- Statement of assets and liabilities at the beginning of the year as well as at year-end. The company´s as well as the owner´s private financial circumstances should be taken into account.
- A so-called capital statement, showing, among other things, the private consumption permitted by the profit as appearing from the annual accounts. Typically, the capital statement is the most difficult one of the three statement types.
How is tax calculated?
Today, the mathematical calculation of individual taxation is so complex that not even an experienced accountant is capable of calculating his/her own tax without the assistance of a computer. Thus, we will not be able to assist you with specific calculations - you must consult alternative sources such as the quite good tax assessment program on Told & Skat´s homepage (www.tastselv.toldskat.dk).
Generally, rather simplified though, taxation of an income earned by independent business activity is equal to taxation of an identical amount earned by a pay earner. This goes for net profits, i.e. all expenses of the business operations is deducted from the turnover prior to the tax assessment.
Auditing Company
As the accounts as mentioned can be rather complex, most independent business owners employ an auditing company for the making of the annual accounts even though this is not an official requirement of the tax authorities.
At least for the start-up year it is a good idea to seek professional assistance if you are not well up in accounting. After the first year, most business owners choose to continue letting the hired accountant take care of the accounts and other taxation matters.
After a few years some choose to save the expenses for an accountant and attempt to do the accounts by themselves. If you know a bit about accounts it is not such an insurmountable task.
Rose
- SKATs Tast-Selv hjemmeside
- Vejledning fra SKAT
- Samling af skatteregler
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