If you haven’t paid your taxes from last year, you better hurry up, because Wednesday July 1 is your last chance before the interest rate almost doubles.
So far this year, only 160,000 Danes have repaid their tax debt, leaving over 790,000 still due to pay.
“If you have the money in your bank account, it is a smart investment to pay off your taxes now instead of waiting until after July 1,” tax adviser Søren Bech told TV2.
If you pay after July 1, the amount owed will increase from 2.9 percent to 4.9 percent, which is equivalent to 7.4 percent before tax.
Hundreds of thousands of Danes in tax debt
Figures reveal that the 790,000 Danes each owe an average of 6,203kr, which means that they will have to pay an extra 304kr because of the increased interest rate.
“In some cases, it might be smart to continue owing money to SKAT. However, this is only the case if you pay even higher interest rates in your bank,” Bech explains.
Besides the increased interest rate, the rate also changes from a daily to an annually rate, which means that if you pay after July 1 the interest rate will be added as if you’ve had the debt for a whole year.
In other words, if you pay your debt before July 1, not only will you receive a lower interest rate, you will also only pay interest until the day you paid, instead of a whole year extra.