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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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TAXES

How much will you save on tax under Denmark’s new rules from 2025?

Denmark’s government has adopted changes to income tax rules which begin to take effect from next year. Who stands to save money from the changes?

How much will you save on tax under Denmark’s new rules from 2025?

Two important changes to Denmark’s income tax rules take effect in 2025. These are beskæftigelsesfradrag, the deduction given to everyone in employment; and new limits to topskat, the high tax rate applied to the top proportion of earnings over a certain amount.

In 2026, topskat rules change again, introducing to new top-end tax brackets known as mellemskat (“medium tax”) and toptopskat (“top-top tax”), which may provide a tax saving or a higher tax burden for the highest earners.

READ ALSO:

In a newsletter, financial services company PwC outlines the implications for tax payers of the above changes, after the Tax Ministry published the thresholds which will be applied to the new rules as well as existing ones. The thresholds are based on priced indexes and updated regularly.

The thresholds confirm higher employment deductions and top-tax earning limits next year, meaning tax savings for both regular wage earners as well as single household providers, PwC says.

“What this will mean exactly for each individual depends naturally on an individual calculation, but many will experience a tax saving to a larger or smaller degree,” PwC tax expert Søren Bech says in the newsletter.

Because the employment deduction or beskæftigelsesfradrag will be increased in 2025, the amount employed people can earn tax-free goes up. The deduction is calculated at 10.65 percent of the wage, but the limit will be raised from 45,100 kroner in 2024 to 55,600 kroner in 2025.

Therefore, the higher limit will benefit people who earn over 423,000 kroner per year, who would have reached the maximum deduction in 2024 but can now continue to earn an additional deduction until their annual income reaches around 522,000 kroner (10.65 percent of this equates to the new limit of 56,000 kroner).

Single household providers get an additional deduction under the new rules, with the 6.25 percent of pay tax deductible in 2024 raised to 11.5 percent next year. 

To give an idea of how much can actually be saved in kroner, PwC writes that an example income of 522,000 yearly in 2025 will give a tax bill lower than 2024 by 2,600 kroner.

A single provider with the same income will save an additional 5,700 kroner on top of this – making them 8,300 kroner better off after tax.

The “top-tax” threshold, after which you pay an additional 15 percent in tax on any income above the threshold (note this does not apply to your entire income, just the portion above the threshold), moves from 640,000 kroner this year to 665,000 kroner in 2025. That is a monthly salary of around 55,400 before tax. 

As such, if your income is over 665,000 kroner per year, you will pay around 3,700 kroner less in ‘top-tax” in 2025. Added to the employment deduction, the total saving is 6,300 kroner across the year.

The situation will change again when new thresholds come into force in 2026, Bech noted in the PwC newsletter.

“The introduction of the medium tax will result in greater tax savings compared to 2025, as the top tax will only need to be paid when income exceeds 750,000 kroner (2024 level). On the other hand, the top-top tax threshold of 2.5 million kroner (2024 level) will lead to a higher overall tax burden,” he said.

“The tax-free gift parents can give to their children will be raised to 76,900 kroner in 2025, so mum and dad can give their child 153,800 tax-free in 2025,” he also noted.

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