Corporation tax

Last updated: 2021-06-21

Corporation tax is the tax that a company must pay on the profit they had during the year. Until 2018, corporate tax was 22%, but has since been lowered and is today at 21.4%. In 2021, corporation tax will be reduced to 20.6%.

The types of companies that pay corporation tax are limited liability companies and economic associations.

Corporation tax is calculated by the difference between the company’s income and expenses. However, there are incomes that are not taxable as well as expenses that are not deductible for the company, which means that the corporation tax is not always exactly the same as the difference between the company’s income and expenses according to the annual report. When drawing up annual accounts, companies can also make provisions for an accrual fund or excess depreciation, in order to reduce the tax cost for the specific year.

In order for the company not to receive tax in arrears, it can pay a so-called preliminary tax on an ongoing basis during the year. It is calculated on the previous year’s results, but can be easily changed on the Tax Agency’s website.