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TAXES

Three things to know about Denmark’s ‘forskudsopgørelse’ preliminary tax return

Over five million taxpayers in Denmark can currently access their preliminary 2023 tax return, or 'forskudsopgørelse' in Danish.

Taxpayers in Denmark can check their preliminary returns from November 18th.
Taxpayers in Denmark can check their preliminary returns from November 18th. Photo: Henning Bagger/Ritzau Scanpix

By logging on to the preliminary return via the skat.dk website, taxpayers can adjust expected income information and tax deductions for the current tax year.

The release of the forskudsopgørelse (preliminary tax return), along with the årsopgørelse (annual return, calculated and displayed on the SKAT website at the beginning of March) are possibly the most important dates on the Danish tax calendar.

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. 

Working from home, which can impact a tax deduction for commuting, is one notable area in which corrections can easily be made and impact the amount of tax you pay.

For taxpayers in Denmark including foreign residents, it’s worth checking several elements of the forskudopgørelse in plenty of time, enabling you to enter updates where necessary.

Self-employed and employed people alike can adjust their tax returns by entering any updated salary, pension or benefits information, along with deductions to which they might be entitled on their forskudsopgørelse.

The preliminary return forms the basis for the deductions, or amount of income on which tax is not paid, each month.

READ ALSO: Tax in Denmark: Preliminary returns open in November

Travel deduction (kørselsfradrag

If you travel a long distance to get to and from work, you may be entitled to deduct some of your travel expenses from your taxable income.

The travel deduction, or kørselsfradrag, is designed to cover the cost of travelling to and from work over a set minimum distance. It applies to rail and car journeys alike (for cars, the cost of fuel used for commuting comprises the deductible amount).

You can claim the deduction if you travel at total of 24 kilometres to get to and from work (12 kilometres each way, in other words). This only applies on days when you actually travelled from your home to a place of work, and not, for example, for days you spent working from home.

Some people now have a lower travel deduction compared to preceding years, with home working more common practice since the Covid-19 pandemic.

Earlier in 2022, the government made the unusual move of changing the rates for the deduction during the tax year, in response to rising fuel prices.

READ ALSO: Denmark raises tax deduction for commuters amid high fuel prices

‘A’ and ‘B’ income

‘A’ income usually registered by your employer with the tax authority, with employers declaring your tax details as they are required to do. In other words, your pay lands in your account with tax already deducted.

‘B’ income does not automatically have the relevant deductions tax deductions applied – you have to register this yourself. This could be relevant for freelancers or people who are paid royalties, for example. With B-income, you have to enter the amount you have been paid, or are expecting to receive, and pay tax yourself, usually via online banking.

If you have lost your job or switched jobs, or taken on a second job, it’s worth checking that the change has been registered correctly and in the right place.

READ ALSO: EXPLAINED: How to understand your Danish payslip

Self-employed people must register profits

If you are self-employed, it’s necessary to register changes to expected turnover at your company.

Shutdowns and compensation packages during the earlier stages of the pandemic affected a wide range of sectors in Denmark.

If you have had to close a company, this must also be registered as it will affect your tax return.

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TAXES

EXPLAINED: How does Denmark’s tax deduction for commuting work?

The most common deduction for taxpayers in Denmark is the 'kørselsfradrag' or commuter deduction. What is it exactly and how does it work?

EXPLAINED: How does Denmark’s tax deduction for commuting work?

The commuter deduction, termed kørselsfradraget (sometimes also called befordringsfradrag) in Danish, is a tax deduction applicable for people who commute more than 24 kilometres to and from work.

The tax deduction is designed to cover the cost of travelling to and from work over a set minimum distance. It applies to rail and car journeys alike although it is always calculated based on kilometres travelled if the journey was made by car, even if it was actually made by train.

You can claim the deduction if you travel over 24 kilometres to get to and from work over (12 kilometres each way, in other words). This only applies on days when you actually travelled from your home to a place of work, and not, for example, for days you spent working from home.

The amount you get back on your tax payments depends on how far you commute and where in Denmark the commute takes place.

For journeys from 25-120 kilometres, the deduction (for the 2023 tax year) is 2.19 kroner per kilometre. Over 120, kilometres, this rate decreases to 1.10 kroner per kilometre. However, 25 so-called “outer municipalities” as well as rural small islands are exempted from this and retain the higher rate for longer journeys.

In 2024, these rates change with two different deductions applied at 25-120 kilometres: 2.23 kroner per kilometre as the general rate and 2.47 kroner per kilometre for outer municipalities. Over 120, kilometres, this rate decreases to 1.12 kroner per kilometre unless in the outer municipalities, where it does not change.

The “outer municipalities” are Bornholm, Brønderslev, Frederikshavn, Faaborg-Midtfyn, Guldborgsund, Hjørring, Jammerbugt, Langeland, Lolland, Læsø, Morsø, Norddjurs, Odsherred, Samsø, Skive, Slagelse, Struer, Svendborg, Sønderborg, Thisted, Tønder, Vesthimmerland, Vordingborg, Ærø and Aabenraa.

Lower rates are available to people who use their bicycles, scooters, mopeds or similar. They can be seen here.

The deduction is not paid out to commuters but is calculated in the annual tax statement (årsopgørelse).

This means that taxpayers must enter correct information about their commutes into their personal tax statement. This can be done in two ways: via the preliminary version of the return, the forskudsopgørelse, or in the annual return, the årsopgørelse, which is released in March.

In 2024, the Danish Tax Agency released annual tax statements for the first time in English as well as Danish, allowing foreign residents to more easily navigate the tax portal and enter their information.

READ ALSO: How you can access (and edit) your 2024 Danish tax return in English

A different tax relief, the befordringsgodtgørelse, is available for people who use their private vehicles for work purposes (i.e., not commuting alone).

Commuters who use their own vehicle for work can claim 3.73 kroner per kilometre back (2023 rate) in tax for up to 20,000 kilometres. Once 20,000 kilometres has been passed, the relief is 2.19 kroner per kilometre.

Employers are required to check that private vehicles are actually being used for their jobs by staff who are claiming the tax relief.

Unlike with kørselsfradrag, the befordringsgodtgørelse is paid out to eligible taxpayers (rather than being integrated into the tax return). The payment itself is tax free.

Some 317,000 people edited their commuter deduction for 2023 within the first three days of the annual statement’s release on March 8th 2024, according to the Danish Tax Agency.

READ ALSO:

While the majority of tax information, such as salary and other income, is provided to the Tax Agency by employers and other agencies, taxpayers must enter their commuting information themselves.

The deduction for commuting is the one Danish taxpayers are most commonly eligible for, Jan Møller Mikkelsen, Deputy Director General at the Danish Tax Agency, previously told news wire Ritzau.

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