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TAXES

Five essential words you need when paying taxes in Denmark

The annual tax return, årsopgørelse is released on Monday so here is a reminder of Denmark’s important tax terminology.

Published: 14 October 2021 17:16 CEST
Updated: 21 February 2023 17:28 CET
The headquarters of the Danish Tax Agency in Copenhagen. A few key vocab items can help you better understand your tax return.
The headquarters of the Danish Tax Agency in Copenhagen. A few key vocab items can help you better understand your tax return. Photo: Mads Claus Rasmussen/Ritzau Scanpix

We hope our brief guide to essential Danish tax vocabulary will give you a little help.

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Self-employed and employed people alike can adjust their tax returns by logging in to the skat.dk website and entering the deductions on their preliminary tax return or annual return.

These are calculated and displayed on the website of the national tax authority, SKAT. As such, a good grasp of the necessary technical terms will help you to fill out your paperwork correctly, including things like any deductions to which you might be entitled.

Forskudsopgørelse, årsopgørelse

Forskudsopgørelse (preliminary tax return) and årsopgørelse (annual return, calculated and displayed on the SKAT website at the beginning of March) are possibly the most important Danish tax terms.

Accessing the annual tax return is a yearly event for taxpayers. Within a set deadline which falls at the beginning of May, taxpayers can edit their tax information, such as by changing income or tax exemption information.

Around three out of four taxpayers in Denmark get refunds after the yearly annual return. The amount refunded varies from person to person, but 2019 saw 3.4 million people paid an average refund of 4,700 kroner, according to official data. Many others have to pay money back to the tax authority, however.

Prior to the publication of the annual return, you can check how much tax you’ve paid or are due to pay during the course of the year and edit your income and deductions details on the preliminary version of the return, the forskudsopgørelse. 

Fradrag

A fradrag or deduction can reduce your tax bill just like in many other national tax systems. These can be entered into your tax returns, as described above.

Various types of deduction are available. These include kørselsfradrag (travel deduction) and håndværkerfradrag and servicefradrag (literally, builder’s deduction and service deduction), given for making improvements to homes or holiday homes.

Various other costs relating to work can be deducted from income tax, including kost og logi (food and accommodation); dobbelt husførelse for housing costs if living away from home temporarily due to work; and A-kasse og fagforening (unemployment insurance and trade union membership).

READ ALSO: Four ways to (legally) lower your tax bill in Denmark

AM–bidrag

AM-bidrag or arbejdsmarkedsbidrag, literally ‘labour market contribution’ is a taxation amounting to 8 percent of your wages. Grammar lovers will note use of the antonym word to fradrag.

The tax is paid directly to SKAT by your employer (for those who are not self-employed or freelance), and will be displayed on your tax returns.

If you are not self-employed or freelance, the wage slip you are issued by your employer will tell you the amount to which this 8 percent taxation is applied: some parts of your gross income are not applicable to the AM-bidrag.

Feriepenge 

Feriepenge (holiday money) is a monthly contribution paid into a special fund, depending on how much you earn.

You can claim back the money once per year, provided you actually take holiday from work.

You will be notified when the money can be paid out around May, and directed to the borger.dk website, from where you claim it back from national administrator Udbetaling Danmark.

Brutto, netto 

Your income before tax is brutto (gross), i.e. the amount prior to calculation and payment of tax and application of deductions. Netto is not usually a supermarket when talking about tax, but is the amount you receive after paying all levies.

EXPLAINED: How to understand your Danish payslip

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JOBS

How much Danish do you need to learn to get a job in Denmark?

Learning a new language like Danish is a process that can take years. So at what level can you test out your new skills and apply for a job in Danish? We spoke to a language teacher to find out.

Published: 8 May 2024 15:38 CEST
How much Danish do you need to learn to get a job in Denmark?

There are many international companies in Denmark where the workplace language is English – opening up opportunities to many nationalities who want to live and work in Denmark. However for some professions, a certain level of Danish is a requirement and for others, working in Danish opens up more doors.

“The level we say you need to get a job is to have passed the Prøve i Dansk 3 (PD3), which is the official exam by the Ministry of Education. It is equivalent to the B2 European Framework level,” Maria-Sophie Schmidt, language consultant at Studieskolen’s private Danish department told The Local.

The Common European Framework of Reference for Languages (CEFR) is an international standard for describing language ability. It uses a six-point scale: A1, A2, B1, B2, C1, C2, where C2 is for those who are advanced and fluent in the language. It means employers and educational institutions can easily assess language abilities.

“When you pass Prøve i Dansk 3 and are B2 level, you’re not completely fluent but you can function in Danish and read newspaper articles in Danish. Usually I say B2 level is like a driver’s license we give you on your Danish. So you can drive a car but if you want to be a really good driver, you have to go practice in traffic. So after PD3 and with practice and with help perhaps, you should be able to write an application in Danish and go through an interview,” Schmidt said.

“PD3 will always help you get a job because companies appreciate you have the certificate. There’s a worry for some companies that you aren’t fluent.

“It is also helpful because Danes like to socialise in our workplaces such as at julfrokost (Christmas lunch) or fredagsbar (Friday afternoon drinks) and some are uncomfortable having to change their language to English all the time, maybe because we don’t feel we speak it well enough. So if you come as a foreigner and have a certificate of Prøve i Dansk 3, I think it’s a big advantage,” Schmidt added.

Foreign dentists and doctors need to have passed Prøve i dansk 3, as well as other professional tests before being able to start an evaluation period of working. 

However there are some sectors where passing the Danish language exam isn’t a requirement. Due to current pressure on hospital waiting times in Denmark, nurses outside of the EU are no longer asked to pass Prøve i dansk 3. Instead, they can demonstrate their Danish language ability, in line with the requirements used for nurses from EU and EEA countries. This includes a six-month probation period where Danish communication skills are assessed.

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The construction industry and engineering, as well as hospitality are other sectors where Danish language skills won’t necessarily need to be B2 level or need certification. But whether or not you require the Prøve i Dansk 3 certificate, practicing Danish is the key to gaining confidence in the Danish workplace.

“Sign up for a language course or sign up to a sports club and surround yourself with Danish language. Insist on speaking Danish and if you know anyone speaking native Danish, ask to have a coffee and practice your Danish. If you have kids and meet other parents, speak Danish, or volunteer at somewhere like a nursing home,” Schmidt suggested.

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Language schools offer a Module 6 course, called Studieprøve to get to C1 level. Here you learn to read, write and speak more academic Danish. It is a requirement for those wanting to study in Danish but you don’t need it for a job.

“At Studieskolen we offer Classes after PD3 – a conversation class at B2 and C1 level where you don’t focus on grammar and writing but on speaking relevant topics in society such as what’s going on now, newspaper articles, TV shows and practice speaking to colleagues in small talk and more complicated conversations. PD3 is a driver’s license but you often can’t join a conversation spontaneously or you may lack confidence and vocabulary, so those classes help that.”

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