Taxes in Denmark 2013
We are all to be equal in Denmark. However, when it is about paying taxes we don't pay an equal amount. This is done for the reason that we are more or less equal after tax. Denmark has a “progressive tax” system: those with higher incomes pay proportionally more in taxes.
For those of you who are not lucky to be on a 26% tax scheme (e.g. researchers)...
The most important tax rates for Denmark for 2013
1. Everyone with work-related income pays the job market contribution (arbejdsmarkedsbidrag, AM-bidrag) of 8 %.
Each person has right to some deductions. More about them below.
On the remaining income, the following tax rates will be applied:
2. The contribution to the health system (sundhedsbidrag) of 8 %.
3. The municipal tax (kommuneskat), which averages to about 24.9 %.
4. Registered members of the Danish National Church pay an extra 0.7 % church tax (kirkeskat).
The rate for no. 2 and 3 can differ from one local authority (kommune) to another, but you can assume an average for Danmark of 25.6 % for both. You can determine the exact tax rates for your kommune via http://www.tax.dk/satser/komm13.htm.
Then follow the income-dependent tax rates:
5. The bottom-bracket tax (bundskat) is paid on income above DKK 42.000 (EUR 5,638) a year (after deducting the job market contribution), and is 6 %.
6. The top-bracket tax (topskat) is paid on yearly income above DKK 421.000 (EUR 56.510) and is 15 %.
Deductions to your tax in Denmark
Personal allowance (personfradrag): Each tax payer has an allowance of DKK 42,000 (EUR 5,638) per year. This will automatically be taken into account without you having to explicitly claim it.
Employment allowance (beskæftigelsesfradrag): This amounts to 4.40% percent up to a maximum of DKK 21,000 (EUR 2.818), and will also be taken into account automatically.
Transportation allowance (befordringsfradrag): Part of the transportation costs for your commute to and from work can be taken into account in your tax statements. The following distance rates have been defined where the distances refer to total daily travel (to and from work):
– up to 24 km = 0
– between 25 and 120 km = DKK 2.13 ( EUR 0.29) per km
– above 120 km = DKK 1.07 (EUR 0.14) per km
Important tax checkpoints
Selvangivelse (preliminary income tax return)
From Feb 1 - 29, 2013, you can make changes to the data which is in your online tax folder. You will see the tax that has been calculated for the previous year and what tax allowances and deductions have been taken into account. Check that all your tax deductions and allowances are mentioned, because most of the other data is reported to SKAT directly by your employer and your bank. Make corrections if necessary. See a sample of a preliminary income tax return.
Årsopgørelse (Annual tax statement)
From March 5, 2013 you will be able to see in your online tax folder the annual tax statement (årsopgørelse) for the previous year. If you need to make corrections you need to do them latest by May 1!
If you are lucky, you will get a tax refund, in which case you don’t need to do anything other than ensure that you have a NemKonto set up. If you have paid too little tax, you need to transfer the outstanding amount to SKAT you will be charged 3.4 % on a day-to-day basis.
Forskudsopgørelse (preliminary income assessment)
Each year in November, SKAT generates a preliminary income assessment (forskudsopgørelse) of your expected income for the following year. As such, your income data is updated for correct monthly deductions. If the data specified is correct, you don’t need to do anything. If it is not correct, you will have to update your SKAT data.
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