- Change to Simple Interest: Starting in 2025, Denmark will transition from compound interest to simple interest for late tax payments and corrections within tax accounts, meaning interest will only accrue on the initial principal, not on accumulated interest.
- Increased Fixed Interest Rate: The fixed monthly interest rate will rise from 0.7% to 0.85%, resulting in a new annual simple interest rate of 12.60% for debts within tax accounts, increasing the overall interest burden for most businesses.
- Uncertainty on Retroactivity and Implementation: The effective date for these changes is still undetermined, and it is unclear whether the new interest rates and calculation principles will apply retroactively to prior debts, which could significantly affect the financial implications for businesses.
Source EY
