Very worried - accountant said I dont have to pay tax then says I will need to pay a lot

Tilmeldt 22. Jul 19

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150yearsOld Skrevet 22-07-2019 kl. 09:19

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Hello

Firstly, I hope its ok that I write in English. My Danish isnt so good.

Background
A few years a go I co-founded a small startup. After a few years I sold most of my shares.
My accountant said that, as long as I use that money for other business related activies then I dont need to pay tax on it.
So I determined I would re-invest these funds in a new venture.

Unfortunately the new venture did not work out. The funds went into software development and the project was unable to be completed.
No profits were ever realized.

Every year I have to do a tax return, and my bank is charging me rediculours fees, and negative interest, so I would like to shut the company down.

My accountant did a quick calcuation and said that I would need to pay a large amount of tax to do this.

I was shocked to hear this as I have basically spent all the money.

Can anyone recommend an accountant to give me a second oppinion. I cannot afford to pay the amount the accountant had told me.

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Tilmeldt 2. Mar 11

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Cookie - John Hannover Fra John Hannover Skrevet 22-07-2019 kl. 10:36

Hvor mange stjerner giver du? :

Gennemsnit 5,0 stjerner givet af 1 person

150yearsOld:
My accountant said that, as long as I use that money for other business related activies then I dont need to pay tax on it.
So I determined I would re-invest these funds in a new venture.

sounds a bit strange unless you sold the activities and the money stayed in the same company which then just continued new activities.

It also sounds strange that you have practically spent all the money AND paying negative interest - that often only comes on amounts over 50 or 100 t and amounts under that is petty cash in negative interest.

Having spend all the money points towards personal company - as i a ltd you would have taken salary and tax would have been paid

If the money are lost - it would normally be as a cost in the company - and that would reduce profit and tax - but YES you must find a new auditor/accountant or get an explanation you can understand from the present

Anyway finding a second opinion will cost you something - and maybe not less than the present accountant who knows the circumstances - but of course - if you get a different answer, then it is worth the money

As you say you have very little funds to pay for a second opinion, I hesitate to recommend any, as those I know, would have pretty much standard prices - but google online accountant and see what comes up, unless someone here will recommend

br John Hannover

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Tilmeldt 22. Jul 19

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150yearsOld Skrevet 22-07-2019 kl. 10:45

Hvor mange stjerner giver du? :

Thanks John

The problem is accountants never say how much its going to cost on their websites.

And I've asked many people if they can recomend an accountant but I've not found anyone who is happy with their accountant.

Regarding the negative interest - I have my business bank account with Jyske and they dont pay any interest for money in that account, and they charge large fees. And I think there is -0.1% interest per year, or something like that.

Its not a personal company, its an A/S. And I didnt take any salary. I put all the money into building a product. Unfortunately there was not enough to complete the development of the product.

Thanks again.

Is there anyone reading this that can recommend an accountant?

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Cookie - John Hannover Fra John Hannover Skrevet 22-07-2019 kl. 11:11

Hvor mange stjerner giver du? :

Gennemsnit 5,0 stjerner givet af 1 person

Yes Jyske is relatively expensive - but if you have little cash standing - e.g 100.000 dkk - then the negative interest (which is much the same i Europe) is 500 dkk - and to live with

In an ApS - closing it down would be two possibilities - voluntary liquidation (where the liquidator takes responsibility that everything is done correctly) - or by tax declaration (where you assume personal responsibility in case there are creditors forgotten)

You will in the end receive the funds that are, when everything has been realised, and the tax will be 27% of the first 54.000 (as I remember) double up for married couples and 42% above that (you may be using the 27% part on other share income already)

So there will not as such be tax on anything else than the profit you get out in the end. What I cannot know, is if your accountant know that there are somethings you have deducted (og the accountant has) which is not valid in the "givenup" building project) but still, it is hard to see a lot of tax in a closing, unless it is because you get even far more out -

Nedlukning af Selskab | DanskSelskab has fixed prices for closing - but if your are complexed and things need to be done - prior to a closing - then I cannot know their price - just as I have not personal experience with them. I do know others who have been satisfied using them

br John Hannover

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Tilmeldt 22. Jul 19

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150yearsOld Skrevet 22-07-2019 kl. 12:25

Hvor mange stjerner giver du? :

Thanks John, this is very helpful.

Cookie - John Hannover:

In an ApS - closing it down would be two possibilities - voluntary liquidation (where the liquidator takes responsibility that everything is done correctly) - or by tax declaration (where you assume personal responsibility in case there are creditors forgotten)

You will in the end receive the funds that are, when everything has been realised, and the tax will be 27% of the first 54.000 (as I remember) double up for married couples and 42% above that (you may be using the 27% part on other share income already)

I confident that there are no forgotten creditors. The only expenses the company had were software developers - who have been paid - and Skat - who I find very confusing!

Is the company taxed on the value of the company, or on what funds it has?

The funds that I recieved from the selling of shares has gone into product development, so from a valuation perspective, the company is still valued the same as when I recieved the payment for the shares. However the product development has not resulted in any income.

Thanks

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Cookie - John Hannover Fra John Hannover Skrevet 22-07-2019 kl. 13:52

Hvor mange stjerner giver du? :

150yearsOld:
Is the company taxed on the value of the company, or on what funds it has?

when you close it - then its value will be in principle the equity - all actives will be realised all debt paid - and that will then show what the value is at closing compared to original company capital. It might be, that there is a value in what was developed - and that value is not just one you can take over without tax at closing - a goodwill value - even if to day no sales.

Funds as such is not the value, as there can be other passives and actives - but after closing - all will be in available funds, paid out and taxed

If there IS no value to it then there is no tax - but based on what you write, no-one can tell if there is a hidden goodwill value which tax could think you "sneak" out of the company at closing. You need to find an auditor you can rely on - as being taxed on some "fictive" goodwill after a closing gone wrong, would be sad. Things have a price - also some good accountant / auditor/lawyer as liquidator I would say in this case - you will end op accepting that - or running a silly tax risk

vh John Hannover

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Tilmeldt 15. Feb 18

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Ole Lynge Andersen Fra Lillebælt Revision Statsaut. Revisionsanpartsselskab Skrevet 22-07-2019 kl. 16:26

Hvor mange stjerner giver du? :

Gennemsnit 5,0 stjerner givet af 1 person

Did your accountant just tell you the tax amount, or do you have the calculation in writing?

It will be much quicker to double-check, if you have it in writing and the assumptions made for the calculation.

You are welcome to PM me your most recent annual report and internal financial statements. I'll take a look and see if anything is obviously wrong. If I need to dig deeper or to recalculate the taxes, I'll probably need more information, but I'll be able to give you an estimated price for this. The initial look at the information is free of charge.

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150yearsOld Skrevet 29-07-2019 kl. 09:08

Hvor mange stjerner giver du? :

Thanks Ole and John

Can either of you recommend an auditor?

@Ole I've sent you a private message with a link to my business numbers. Did you receive this ok? Is there additional info you would like?

Thank again

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Tilmeldt 2. Mar 11

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Cookie - John Hannover Fra John Hannover Skrevet 29-07-2019 kl. 11:10

Hvor mange stjerner giver du? :

Ole is such an auditor and can be recommended

br John H

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Tilmeldt 15. Feb 18

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Ole Lynge Andersen Fra Lillebælt Revision Statsaut. Revisionsanpartsselskab Skrevet 29-07-2019 kl. 11:44

Hvor mange stjerner giver du? :

150yearsOld:

@Ole I've sent you a private message with a link to my business numbers. Did you receive this ok? Is there additional info you would like?

I haven't received any private messages from you.