D.1.1 Pension providers liable to taxation under Section 1(2) of PAL and pension plans liable to taxation taken out with pension providers (Section 21 of PAL)

Contents

This section describes when pension providers liable to taxation under Section 1(2) of PAL and pension providers not covered by Section 22 of PAL which offer plans under Section 1(1) of PAL submit statements of the basis of taxation and pay PAL tax.

The section covers

Deadline
Calculation of interest
Interest rate
Payment
Plans covered by Section 1(1) of PAL
Notification to the person liable to taxation

Deadline

►Under Section 1(2) of PAL, pension providers must submit by 31 March after the end of the year of taxation at the latest:◄

the statement of the basis of taxation
the taxable part thereof
the tax for the year of taxation

►See Section 21(1), first sentence of PAL. ◄

See also

If the deadline falls on a Saturday, Sunday or public holiday, the deadline is extended. See section D.1.7, Special information on the deadline for submitting statement and paying PAL tax.

Calculation of interest

Pension providers must calculate interest on the final PAL tax for the year of taxation from the period 20 February in the year after the year of taxation and until payment is made. See Section 21(1), Item 2 of PAL.

Interest rate

SKAT publishes the interest rate.

Interest is calculated as a simple average of the effective interest rates determined on a daily basis by the OMX Nordic Exchange, Copenhagen, Denmark, in the first 7 months of the year prior to the year of taxation on bonds with a term to maturity of more than 5 years. See Section 21(1), Item 4 of PAL, cf. Section 27(5) of PAL.

If the PAL tax is overdue, the interest under Section 21(1), Item 2 of PAL, however, is only calculated up until the final due date for payment, which is 31 March.

After the final due date for payment, the PAL tax payable carries interest pursuant to the provision set out in Section 28, see section D.3, Default interest.

Payment

The PAL tax plus calculated interest is paid at the time of submission of the statement. See Section 21(1), Item 3 of PAL.

The basis of taxation, the taxable amount thereof and the PAL tax must be declared in Danish kroner (DKK), and the PAL tax must also be paid in DKK. Foreign pension providers must undertake to translate any foreign currency into DKK in respect of plans taken out by pension holders with such pension providers. The translation must take place at the average current rate of exchange at the end of the year of taxation, i.e. 31 December. See the comments on the bill to amend PAL (L 10) of 28 November 2007.

►The total tax amount and the total interest amount must be rounded off to the nearest whole Danish krone (DKK). The tax amount collected from the pension plan holder must not be rounded off. ◄

Payment must be made into account no. 3100 781 1020.

The statement must be sent to Skattecenter Maribo, Brovejen 15A, 4930 Maribo, Denmark, on a form prepared by SKAT. See Section 1 of Danish Order no. 1540 of 13 December 2007 on the rules in the Danish Pension Investment Return Tax Act on foreign pension providers and on compensation disbursements.

Plans covered by Section 1(1) of PAL

The pension provider with which the plan has been taken out must determine the basis of taxation under Section 4(1)-(6) of PAL.

Pension providers must determine and withhold the PAL tax for each plan prior to the

addition of funds to the custody account,
addition of funds to special bonus provisions, or
disbursement of pensioner allowance.

Notification to the person liable to taxation

Each year, the bank or pension provider must notify the person liable to taxation of the payment of PAL tax.

Such notification must be made in writing. See Section 19 of Order no. 1540 of 13 December 2007 on the rules in the Danish Pension Investment Return Tax Act on foreign banks and pension providers and on compensation disbursements.