TaxWatch:

New interest free VAT loans for SMEs

26 February 2021

It has now been decided that small and medium-sized enterprises can lend an interest free amount corresponding to the VAT that must be reported and settled on March 1, 2021.

For a company that settles VAT semi-annually, this means that the company will be able to lend an amount corresponding to the total VAT for:

  • VAT liability for the first half of 2020
  • VAT liability for the second half of 2020.

For a company that settles VAT quarterly, it means that the company will be able to lend an amount corresponding to the total VAT for:

  • VAT liability for the third quarter of 2020
  • VAT liability for 4th quarter of 2020.

 

Do I have to report VAT on time?

Yes, as the VAT loan is a prerequisite for the VAT to be reported correctly and by the deadline of March 1, 2021. If the VAT is not reported on time, the company will not be eligible for a VAT loan.

 

Do I have to pay VAT on time?

It is not a requirement that VAT is paid on time to be eligible for VAT loan. However, the company must be aware of:

  • It may be possible to get a loan anyway. The non-payment will be converted to an interest free loan, but the loan will go to cover the amount due – and therefore the loan will not be disbursed.
  • There will be interest on the payment, until a possible loan is granted.
  • There may be a reminder for the payment and a reminder fee will be added.
  • A possible loan will not include these interests and fees. Interests and fees must therefore be paid by the company itself, because otherwise these will be transferred to recovery.
  • Not all companies can be approved for a loan (e.g. not companies in bankruptcy, reconstruction, liquidation or compulsory dissolution).

 

Where can I apply for a VAT loan?

It is not yet possible to apply for a VAT loan. Applications are expected to open in mid-March 2021.

Application will, when opened, happen on virk.dk. You can read more about interest free VAT loans on SKAT’s website

 

How is the loan disbursed?

If your company gets approved for a loan, the loan will appear in your company’s Tax Account. If your company has unpaid claims on the Tax Account, the loan will go to cover these claims. The loan is then set off against any other public debt (if your company has any). If there is any money left, the rest of the loan is disbursed to your company’s NemKonto.

To get the money disbursed, however, it requires that you set your company’s payout limit on the Tax Account so low that the remaining money can be automatically disbursed to your company’s NemKonto. The payout limit must be adjusted manually on TastSelv.

 

When must I refund the loan?

The loan must be refunded by February 1, 2022.

The recently adopted proposal also contains further changes to the payment deadlines for A-tax and AM contributions, as well as further possibilities for taking out interest free A-tax loans etc.

 

Do you have further questions about the new interest free VAT loans, aid packages or anything else?

Contact us