VAT loans based on prior VAT remittances during pandemic
Denmark has extended again its innovative VAT loan repayment scheme as coronavirus lockdown is extended. It is also pushing out its wage tax plans. The loan scheme, launched in April 2020, enabled taxpayers to request a temporary repayment of any VAT they had already declared and paid in 2020.
Register for our FREE global VAT and GST news updates.
The plan had been to treat this as an interest free loan – enabling a quick cash flow injection (bypassing the banking system) as the first lockdown was introduced. The loan was to be repayable by 1 April 2021. The scheme was only made available to businesses with a turnover below DKK 5m.
The newest iteration of the scheme will allow small businesses to borrow an amount equal to their first quarter 2021 VAT liability. This would ordinarily be due by 1 June 2021. Instead, the taxpayers can apply to delay this until 1 November 2021.