Due to the nonlinearities of the voltage-source inverter (VSI) in a permanent magnet synchronous machine (PMSM) drive system, there is always an error between the reference voltage and the actual output voltage. To compensate the voltage error, many schemes have been proposed based on the phase current polarity. However, due to factors such as current clamping, measurement noises, and control system delay, the accuracy of the detected current polarity is relatively low, especially when the current is around zero, which would therefore affect the compensation performance. To solve this issue, a deadbeat prediction-based current zero-crossing detection method (DP-CZD) is proposed in this paper. With the proposed method, the measured three-phase currents are replaced by the predicted three-phase currents in terms of the polarity determination, when the absolute value of the phase current is within the threshold range. Compared with the conventional phase current polarity detecting methods, the proposed method can greatly improve the accuracy of detected current polarity due to its smooth transient waveform, and consequently, contributes to the much higher accuracy and lower total harmonic distortion (THD) in the compensation of VSI nonlinearity, which is verified through a prototype surface-mounted PMSM.