Forskudsskatter

Forskudsskatter, often translated as preliminary tax or advance tax, is a system in place in several countries, notably Denmark, for collecting income tax throughout the year rather than as a lump sum at the end. The core principle is that taxpayers pay their estimated tax liability in advance, typically in monthly installments. This system aims to align tax payments with the period in which income is earned, smoothing out the financial burden for individuals and businesses.

The calculation of forskudsskatter is usually based on an individual's or company's previous year's income and deductions, with adjustments made for anticipated changes in income or circumstances. Tax authorities provide a preliminary tax assessment, often referred to as a tax card or tax return for the upcoming period. Taxpayers are generally responsible for ensuring their advance payments accurately reflect their projected tax obligations. If the advance payments are too low, a supplementary tax payment may be required at the end of the tax year. Conversely, if too much tax has been paid in advance, a tax refund will be issued. This system is designed to prevent large, unexpected tax bills and to provide a more predictable cash flow for both the taxpayer and the government.