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Report earnings in a limited company

A limited company must always file its own income tax return, where it reports it earnings for the tax year. The final tax payable by the company is shown in the final tax assessment notice.

As a partner in aclose company, you mustdeclare dividends andcapital gains on qualifying shares. Even if you have not taken any dividends or sold any shares, you should file this annex.

If the limited company makes a loss

Inlimited companies, it is possible carry forward a deficit in the business and apply it in the future. The deficit is entered in next year's tax return and reduces next year'sincome. The deficit can be saved for as long as you wish.

There is a restriction on the possibility of using an old deficit in connection with changes of ownership. This prevents the possibility of trading in deficits.

Tax allocation reserve

The rules regardingtax allocation reserve mean that the limited company can defer the taxation of thebusiness income to a later year. The company can thus obtain a kind of tax credit. The tax allocation reserve can also be used to even out the results between different years and thus achieve more even taxation. If you know you will have a loss in a particular year, you can allocate money to the tax allocation reserve in years leading up to this and then reverse it to taxation in the year with loss. In this way, you can offsetprofit against loss.

In limited companies, 25 percent of profits can be set aside in a tax allocation reserve. The reserve must be reversed to taxation within six years. Limited companies and otherlegal entities are taxed at a standard tax rate on allocations made to the tax allocation reserve.

Limited companies report their results in their ownincome tax return, Income Tax Return 2.

If you cannot submit your return by the deadline

If the company is unable to submit the tax return on time, it is possible to apply to the Swedish Tax Agency for anextension. To be granted an extension, there must be compelling reasons.

VAT and PAYE tax returns

All companies that are registered for VAT must submit aVAT return. The VAT return can be submitted quarterly or monthly. In some cases, it may be submitted once a year.

If your company is an employer, you must submit aPAYE tax return if you were obliged to pay employer's contributions and make tax deductions. The company must also submit a PAYE tax return if you made tax deductions without being obliged to make deductions.