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TAXES

The essential tips to help navigate your Danish tax assessment

Denmark's tax season will get under way on Monday morning, with thousands immediately flocking to the Tax Agency’s website to find out whether they are owed money back or have to pay arrears.

The essential tips to help navigate your Danish tax assessment
Denmark's tax season begins on March 11th. Photo: Signe Goldmann/Ritzau Scanpix

Denmark’s årsopgørelser or annual tax assessments will be published on Monday March 11th. This year sees the statements available in English, making it easier for foreign nationals and non-Danish speakers to navigate their tax returns.

Annual tax returns (årsopgørelser in Danish) are released in March and finalised by early May, meaning taxpayers have this period to correct the information on their tax returns from the previous calendar year. It is common for taxpayers to make some corrections to their statements, for example in relation to deductions that they qualify for, or if their earnings have changed.

When the annual statement is released annually in March, you can see if you are owed money back or if you paid too little in taxes during the preceding year. In most cases, rebates are automatically deposited into your bank account.

Although parts of the Skat website have been available in English for a number of years, it has not previously been possible to access and view the tax statement in English to make corrections. You can log in to the annual tax assessment in English via the Skat website’s English-language version.

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

We asked the Danish Tax Agency (Skat) what newcomers to the Danish tax system — who maybe accessing and updating their assessments in English, or for the first time — should keep in mind.

“Being met in a language that is easier to understand than Danish builds trust and increases understanding. The translation of E-tax for individuals [tax assessment portal, ed.] helps more individuals to become more familiar with their tax payments,” Jan Møller Mikkelsen, Deputy Director General at the Danish Tax Agency, told The Local via email.

Mikkelsen added that the tax portal has also been given a design boost that will benefit users.

“At E-tax for individuals, it is possible to view and change your tax assessment notice, authorise an accountant or relatives and pay taxes. Anyone who pays tax in Denmark can use E-tax – also from countries outside Denmark,” he said.

Most of the information you will see on your assessment is provided to the agency automatically by banks and employers, so taxpayers will have either a low number or no changes to their returns. Tax deductions for things like transport or household services are not automatically reported, however.

“The Danish Tax Agency receives most of the information for the tax assessment notice from banks, employers or the student grant provider (so) most taxpayers have no or just a few changes to their tax assessment. Most changes are deductions for transport between home and work and deductions for household services,” Mikkelsen said.

If you are due money return for because you paid a surplus in 2023, you should note the date April 12th — this is the date refunds will start.

Several other dates are also relevant during the tax season, Mikkelsen said.

“The deadline for making changes to your tax assessment notice for 2023 is May 1st 2024. Business owners have to report business profit or loss (the business result) for income year 2023 by no later than July 1st 2024,” he said.

Taxpayers can log on to the E-tax portal here and find further information about their assessment on the Danish Tax Agency website here.

The Danish Tax Agency can also be contacted via telephone in case of queries regarding your annual return. The telephone number to contact the agency is 7222 2828.

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For members

TAXES

How does income tax work in Denmark?

Denmark is an expensive place to live, which makes understanding taxes even more important.

How does income tax work in Denmark?

All wage earners in Denmark pay an income tax (indkomstskat), which consists of various components. The largest part of most people’s income tax is municipality tax (kommuneskat), which I about 25 percent of your gross income (the actual percentage varies by 1-2 percent depending on the municipality in which you live).

A salary in Denmark also include deductions for labour market tax (AM-bidrag 8%), state tax (bundskat 12%) and state pension contribution (ATP-bidrag 94.65 kroner).

If you have an income of 45,500 kroner per month (which is the average salary in Denmark, according to Statistics Denmark), that means around 45 percent will be taxed, and 94.65 will go towards the state pension.

Various tax deductions can result in this amount being reduced, the most common one being for commuting to work.

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Depending on your earning levels, you may also be taxed at higher rate for the highest bracket of your salary. This high-wage tax bracket is called topskat (literally “top tax”).

The amount you need to earn to pay topskat changes each year but in 2024, the threshold is 640,108 kroner. After labour market contributions (AM-bidrag), this is 588,900 kroner. 

If you earn less than this, you don’t pay topskat. If you earn more than this, you pay a tax rate of 15 percent on all earnings from this threshold and up.

To give an example, if you earn 690,108 kroner before labour market contributions, you will pay 15 percent topskat on 50,000 kroner of your earnings – the amount by which the threshold is exceeded.

A major tax reform to be phased in from next year will see several changes to the income tax system, particularly in relation to top tax and other tax brackets.

Topskat will be halved for persons whose annual income is under 750,000 kroner, meaning they will pay a rate of 7.5 percent on income that falls into the topskat bracket, instead of the regular 15 percent. This “lower” rate of topskat has been termed mellemskat (“medium-tax”).

A new rate will meanwhile be introduced for the very highest earners, often referred to in Danish as toptopskat, literally “top-top-tax”. The new bracket will apply to people with annual incomes over 2.5 million kroner.

As well as income from employment, other types of personal income are included in the tax calculation. These can include pension distributions, social security benefits, property earnings, remuneration for advisory assistance and dividends from Danish companies.

complex list and system of deductions (fradrag) is used by the Danish tax model, such as the commuter deduction mentioned above as well as pension contributions, trade union and unemployment insurance memberships, home services and work costs. Deductions can be applicable to the various types of income or tax base.

Do you have any specific questions about the Danish tax system you’d like us to write about? Let us know.

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