Tax accounts: What to do

You need to prepare your company’s financial statements for the past year. This is where you can find the figures which you need to report to us. It is important that you have kept your bookkeeping up to date throughout the year in order to prepare the accounts.

There are different types of financial statements, and we certainly appreciate that it can be a difficult area to navigate. We distinguish between:

Tax accounts/financial statements: You must prepare these whatever your business type. If you own a sole proprietorship, partnership or a personally owned small business, your tax accounts are usually the same as your financial statements.
VAT accounts: These must be prepared if your business is registered for VAT. This is an integral part of your tax accounting. Get help with your business VAT accounts
Annual report: You only need to prepare an annual report if you own a company (ApS or A/S). Get help with your annual report in our start-up guide for companies

As a sole trader, partnership or personally owned small business, you can find help here on how and when to prepare your tax accounts. You must declare the profit/loss from your accounts in a tax return form from mid-March (when the tax assessment notice opens) to 1 July.

Tax accounts must be prepared for the financial year that follows a calendar year and which runs until 31 December. If you started your company during the year, for example on 15 September, your financial year will run from 15 September to 31 December.

Prepare your accounts before 1 July

You can prepare your accounts between 1 January and 1 July the following year. You must use the profit/loss from the accounts when you declare the profit/loss to us in your tax return, and which must be submitted before 1 July.

Your tax accounts basically consist of the following:

The income statement shows your business’s total income and expenses. This is where you will find your business’s profit or loss, and the interest income or interest expenses that you need to disclose.
The balance sheet is a statement of what your business owns and has in the way of assets – and what it owes and has in the way of debts (liabilities). The difference between these two is the business’s equity. Your liabilities and assets must always match.
- Assets can be, for example, inventory, fixtures and fittings and machinery.
- Liabilities are the capital which you as the owner have invested in the business (equity) and any debts, such as VAT owed and loans.

Example: Structure accounts with income statement and balance sheet

Here is an example of a financial statement with an income statement and a balance sheet. If you are unsure about what the different items are, read more in the graphic.

Income statement

1 January - 31 December

Income
Sale of goods	DKK 275,500
Cost of sales	DKK 155,000
	120.500 kr.

Expenses
Phone, internet	DKK 9,800
Insurances	DKK 7,160
Rent	DKK 40,000
Depreciation 25%	DKK 10,000
Transport	DKK 29,040
	DKK 96,000

Profit/loss for the year before interest
	DKK 24,500
Interest income	DKK 0
Interest expenses	DKK 1,500
Profit/loss for the year	DKK 23,000

Balance sheet

31 December

Assets
Equipment	DKK 30,000
Stock	DKK 30,000
Cash balance	DKK 0
Bankbeholdning	20.000 kr.
Debtors	DKK 17,000
	DKK 97.000

Liabilities
Equity, beginning of year	DKK 0
Profit/loss for the year	DKK 23,000
Private withdrawals	DKK -20.000
Equity, year-end	DKK 3,000

Bank loan	DKK 41,000
Creditors	DKK 33,000
VAT due	DKK -20,000
	97.000 kr.

From accounts to tax return

You need the information from your accounts to submit your declaration to us via your tax return in E-tax (TastSelv Borger). In the example above, under ‘Income statement’, you can see that the business’s profit is DKK 24,500 before interest. This is the amount you must declare as the profit in your tax return. If you are registered for VAT, you must report the VAT due under ‘Liabilities’. In this example, the VAT which the business is due to pay is DKK 20,000.

The information you need to provide from your accounts depends on which type of business you own as well as your revenue.

Tax return: What to do

Tax accounts: What to do

Create the accounts for the calendar year

Structure the accounts with income statement and balance sheet

Accounts and vouchers must be kept for 5 years

Video: How to do your accounts