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RELIGION

Why does Denmark have church tax and do you need to pay it?

Church tax in Denmark is voluntary but 72 percent of the population pay it. We take a look at why.

Why does Denmark have church tax and do you need to pay it?
Our Lady's Church in Aalborg. Photo: Henning Bagger/Ritzau Scanpix

What is church tax?

Income tax in Denmark is divided into a number of components. There are the two state taxes, basic and top tax (bundskat and topskat,); municipal tax (kommuneskat) and labour market tax (AM-bidrag).

There is also a voluntary church tax, called kirkeskat. The exact rate of this depends on the municipality but it averages at 0.87 percent.

You pay this church tax when you become a member of the national church in Denmark, the Evangelical Lutheran Church, which in Danish is called Folkekirken

How many people pay church tax in Denmark?

According to Statistics Denmark, there are 4,276,271 people in Denmark registered as members of the Church of Denmark (Folkekirken) out of a population of 5,932,654. That means around 72 percent of people in Denmark are members of the National Church and pay church tax.

Church membership in Denmark has remained high for the past ten years, despite several surveys showing less than a fifth of Danes see themselves as “very religious.”

However there was a spike in the number of people leaving the church in 2016 following a nationwide advertising campaign by the country’s atheist society.

What happens when you become a church member?

Anyone can attend a service at a church in Denmark but to hold an event, such as a baptism, wedding or a funeral, you must be a member of the Danish church and pay your voluntary church tax. When you are a member, you do not pay the church for a wedding or burial.

This is why many people in Denmark are members, as well as wanting to support the maintenance of the church buildings, some of which date as far back as the Middle Ages. 

At least one of the couple must be a member of the Danish church to be married there. You can usually only be buried with the presence of a priest if you are a member of the church when you die.

You cannot vote in or run for parish council elections unless you are a church member.

How do I become a member of the church?

You become a member of the Danish church, Folkekirken when you are baptised. If you are a member of an Evangelical Lutheran church abroad, you automatically become a member when you take up residence in Denmark. 

If you’re baptised from another church, you can become a member by filling in a form at your local church.

You don’t need to be a Danish citizen to become a member of the church, but you cannot be a member of both the Evangelical Lutheran Church and another religious community at the same time.

Young people aged 15 and over decide themselves whether to be baptised and become church members or leave the church.

READ ALSO: The complete guide to confirmation in Denmark

Denmark is divided into parishes, and each parish has its own church. If you wish to belong to a church in another parish, you contact the priest at the parish that you would like to join.

You can find your parish church here.

How does it affect my taxes?

Once the church has confirmed you as a member, it is updated on the national record, the central person’s register (CPR) and your church tax will automatically be drawn from your monthly salary and appear on your payslip as kirkeskat. The exact rate depends on the municipality but according to Folkekirken, it averages at 0.87 percent. It is calculated based on your total income.

Children and young people who do not pay tax do not pay for membership.

READ ALSO: EXPLAINED: How to understand your Danish payslip

Denmark has around 2,400 churches and 2,000 cemeteries. The church tax covers the running and maintenance of the churches in the municipality. It ensures that a service is held every Sunday in local churches across the country, as well as other events and community services.

What if I want to end my church membership?

You can decide at anytime to end your church membership and church tax. You can do this by submitting a form to your parish church. This can be done in person or in writing and you can find your local parish here.

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For members

TAXES

Denmark and Sweden simplify tax rules for Öresund commuters

A tax arrangement between Denmark and Sweden for people who commute across the Öresund has been revised in a move the countries say will simplify cross-border working.

Denmark and Sweden simplify tax rules for Öresund commuters

The new rules, which will take effect from 2025, were confirmed in statements released by the Danish tax ministry and Swedish finance ministry on Monday.

Revised taxation of both Danish and Swedish taxpayers who cross the Öresund will “help make the already-well functioning labour market on both sides of the Öresund even better,” the Danish statement said.

The new version of the tax agreement will mean a lower administrative burden for both commuters and employers, it said.

It also “tidies up” and simplifies existing rules, according to Denmark’s tax ministry.

“An integrated labour market spanning the Öresund is unconditionally benefits both Denmark and Sweden. I’m therefore pleased that the Danish and Swedish governments have agreed on an adjustment of the Öresund agreement which means fewer rules for commuters and employers to navigate,” Danish tax minister Jeppe Bruus said.

In the statement from Sweden’s Ministry of Finance, minister Elisabeth Svantesson called the agreement “good for Swedish growth, the tens of thousands of commuters who commute across the Öresund daily, and all Danish and Swedish businesses who want to invest in our country”.

“Now, for example, public employees will be able to work from home like all other workers without the risk of having to pay tax in their home country,” she said.

The Öresund Agreement, first signed in 2003, primarily regulates taxation of persons who live and work on opposite sides of the Öresund strait which separates Denmark and Sweden, notably the Copenhagen and Malmö regions.

Until now, the agreement has limited the extent to which Öresund commuters can work from home while still paying tax in the country to which the work is registered.

Currently, public sector workers who work partially from home must declare how many days they work at home and how many they work on site – in other words, across the Öresund. That is because taxation is divided according to where the work is filed. This does not apply to the private sector, where the entire income is taxed in the country of employment.

The new agreement will allow both private and public sector staff to work from home while paying full tax in their employment country. Additionally, it scraps rules requiring the home working to take place at the commuters home address – meaning they can, for example, work from a summer house or other location on their side of the Öresund.

“Publicly employed commuters should not have hassle with their annual tax statements when we already have rules which work well in the private sector. We are therefore now unifying the rules,” Bruus said.

Additionally, the revised agreement will introduce unified rules on taxation of Denmark’s state student grant, SU, and on dividends from pension schemes. That means rules will be applied equally regardless of whether the country of residence is Denmark or Sweden.

It also includes a provision for Denmark to compensate Swedish municipalities for municipal income tax not paid by commuters employed in the public sector, under the terms of the agreement.

Some 17,000 people travel from Sweden to Denmark for work annually, and 1,400 travel in the opposite direction according to the Danish tax ministry.

Students living in Sweden and studying in Denmark with Danish student grants (SU) will also pay more tax under the new agreement. Under current rules, SU for these students is not currently taxed, as student grants are not taxed in Sweden.

According to the new agreement, Denmark will gain “the opportunity to tax people receiving Danish SU, whether they live in Denmark or Sweden”.

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