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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?
The Danish Tax Authority's website. Photo: Signe Goldmann/Ritzau Scanpix

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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POLITICS

EXPLAINED: How AI deep fakes are bringing new tensions to Danish politics

Denmark's culture minister said on Monday he hoped to use copyright law to bring an end to the controversial new trend of using deep fake videos in politics. Here's the background.

Published: 13 May 2024 15:13 CEST
EXPLAINED: How AI deep fakes are bringing new tensions to Danish politics

Jakob Engel-Schmidt, who represents the Moderate Party, warned that the technique, used in recent videos by the far-right Danish People’s Party and libertarian Liberal Alliance were the “top level of  a slippery slope that could end up undermining our trust in one another and making every political message, newspaper article and artistic publication a potential battleground for whether it is true or false”. 

Which parties have used deepfake video in campaigning? 

The Danish People’s Party at the end of last month issued an AI-generated deepfake video showing a spoof speech in which Prime Minister Mette Frederiksen appeared to announce that Ascension Day, Easter and Christmas would no longer be public holidays, and that they would all be replaced by the Muslim festival of Eid as the country’s only holiday. 

This was a satirical reference to the government’s unpopular decision to abolish Store bededag, or “Great Prayer Day” as a public holiday. 

The video was clearly labelled as AI-generated, and ends with the Danish People’s Party’s leader, Morten Messeschmidt, awakening from a nightmare. 

The Liberal Alliance also released a video for Great Prayer Day, in which it used AI to turn Prime Minister Mette Frederiksen (S), Defense Minister Troels Lund Poulsen (V) and Foreign Minister Lars Løkke Rasmussen (M) into eccentric-looking characters similar to those in the film’s of the US director Wes Anderson.

What kind of a stir have the videos caused in Denmark? 

Denmark’s Minister for Digitization, Marie Bjerre, who represents the centre-right Liberal Party, was sharply critical of the Danish People’s Party’s move. 

“I think it is way over the line for the Danish People’s Party to make a deepfake of a political opponent. I don’t think it’s proper either, and they shouldn’t do it,” she said. “It is also a problem for our democracy and society. Because with deepfakes, you can create material that looks extremely credible, which means that you can really spread misinformation. That is why it is also very serious that the Danish People’s Party is using deepfake for this kind of thing.” 

She said that such videos should only be allowed if the organisation making or distributing them have received consent from the person depicted. 

“If you want to make deepfakes of people, you must ask for permission. That will be the proper way to do it,” she said. 

Messerschmidt defended the video as light-hearted satire that at the same time educated Danish people about the new technology. 

“What we can do is show Danes how to use the new technologies and how to use them in a good way, like here in an entertaining and satirical way,” he said. 

Although Engel-Schmidt said he was concerned about the use of deepfake videos in politics, he acknowledged that the light-hearted videos released by the two parties were in themselves unlikely to deceive anyone.  

How does Engel-Schmidt hope to regulate such deepfake videos? 

He said he aimed to see whether copyright law could be used to regulate such videos.

Presumably this would mean seeing whether, under law, people have a right to the use of the own image, personality or voice, and can therefore forbid them from being used without permission. 

What do the experts say? 

Christiane Vejlø, one of Denmark’s leading experts on the relationship between people and technology, welcomed the government’s moves towards regulating deepfake videos, pointing to the impact they were already having on politics in other countries such as India and the US.

“There is no doubt that we will have to deal with this phenomenon. It has an impact on something that is most important to us in a democracy – namely trust and faith in other people,” she told Denmark’s public broadcaster DR.

In the current Indian election campaign, she said that deepfakes of popular Bollywood actors had been used to criticise the current government and encourage voters to vote for the opposition.

“In India and the USA we see politicians saying things they could never think of saying. We are getting an erosion of the truth,” she said. 

She said that even if the videos were clearly labelled as AI-generated, it did not necessarily make them unproblematic. 

“Even if you can see that it is a deepfake, it can still influence voters to think that there is something wrong with them [the politician] or that they look stupid,” she said. “We have a situation where another person is used as a digital hand puppet.” 

 
 

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