New interest rates for calculating day-to-day interest for 2023

As 2023 is coming to end, the deadline for payment of taxes related to 2023 without any interests or surcharges applied is as well.

This year in particular marks a change due to the general developemnt in interest levels in Denmark. The rate of interest and surcharge has gone up dramatically since last year and it is, therefore, highly worthwhile to consider payment of outstanding taxes before the year comes to an end.

This year, the pro anno interest rate is 5.5% until July 1st 2024, after which The Danish Tax Agency (Skattestyrelsen) will charge a fixed surcharge of 7.5%. Last year, the pro anno rate was 1.7% and the residual tax surcharge was 3.7%.

It is worthwhile to consider paying the residual tax, but of course it depends on the amount of the interest.

Day-to-day interest from January 1st to July 1st 2024

On residual tax paid after January 1st 2024, a pro anno interest must be paid from January 1st to July 1st 2024.

The pro anno interest rate for the income year 2023 is set at 5.5% per year. In reality this corresponds to approx. 8% before tax for most people, as the interest is not deductible. This is a significant increase compared to 2022, when the pro annorate was 1.7% after tax.

Therefore, it might be wise to give some consideration on whether or not to pay the back tax, especially if it is not paid by 1 July 2024 at the latest.

Payment after July 1st 2024

After July 1st 2024, a residual tax is charged with a surcharge of 7.5%. For most people, this corresponds to approximately 11% before tax in a 6 month period, as the interest is not deductible. It can thus be of significant importance if the residual tax is paid on or after July 1st 2024.

Again, this is a significant increase compared to 2022, with a doubling of the surcharge from 3.7% to 7.5%.

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AAA Silver rating to Crossbord

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Changes to law about tax relief in Denmark

With a new judgment rendered in December 2023 the application of Ligningsloven (LL) clause 33A has changed.

LL clause 33A is often used in foreign based projects and employments and is therefore relevant for many of our clients, who have employees staying outside of Denmark for periods of time.

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