For selfemployed individuals, business and professional income is, as a main rule, taxed as personal income, where expenses incurred in acquiring, securing and maintaining the taxable income in general are deductible. Net losses can be deducted in other personal income, for example in income from employment. The selfemployed individual can however, choose between several special regimes for the taxation of business and professional income. In the following only “Virksomhedsskatteordningen” will be described briefly.
“Virksomhedsskatteordningen” allows profits to be "retained" in the business against a provisional taxation of 25 %, instead of normal individual income taxation of up to 51,5 %. The tax liability is thereby partly postponed, while only profits which are not retained in the business are fully taxed.
In contrast to the normal individual income taxation, interest expenses is fully deductible under this regime. The tax value of the interest expense deduction is thereby increased compared to the normal rules. The regime also allows deficits from business to be set of against taxable personal income. “Virksomhedsskatteordningen” thereby combine the advantages under the normal individual income taxation, with full interest expense deduction and a low provisional taxation.
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Inwema 2010 
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