Question
A company located on the outskirts of Copenhagen owns an estate. It operates a hotel and a restaurant in the main building, and it also
A company located on the outskirts of Copenhagen owns an estate. It operates a hotel and a restaurant in the main building, and it also leases to farmers some meadows which form part of the estate. In 2019 it earned a profit of 1m DKK, 0.8m DKK coming from the hotel and restaurant business and 0.2m DKK from the leasing of meadows. The financial result of 2020 was, in view of COVID-19, a loss of 0.3m DKK. Admittedly, on leasing of meadows it still earned the same profit as in 2019, viz., 0.2m DKK, but the hotel and restaurant business generated a loss of 0.5m DKK. The corporate tax system is schedular, requiring the grouping of profits into three different categories: financial profits, real estate profits and all other profits. Denmark has a classical corporate tax system. The corporate tax rate is 22%.
3.1. How much corporate tax was due from the company for 2019?
3.2. How much corporate tax was due from the company for 2020?
3.3. If Denmark had an advance-corporate-tax system, functioning on the basis on the immediately prior year’s profits, what would be the position of the company vis-à-vis the tax authority in 2021 when the time came to file a corporate-tax return about the profits of 2020 and pay the corporate tax for 2020?
3.4. Would any corporate tax be due if the company (and the estate) were located in Estonia? Why? If yes, how much?
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