Planning a trip to Denmark for work purposes involves dealing with tax issues. Whether you will be working as a salaried employee or self-employed, every tax resident and those working in Denmark are required to file a tax return. It is crucial that you know how to properly fill out the necessary documents. Although the procedure may seem complicated, proper preparation and knowledge of the rules enable it to be done efficiently.
Tax settlement in Denmark can be complicated, but with our help it will become simpler and clearer. We offer comprehensive assistance in filling out the necessary documents, such as Arsopgorelse or Selvanguvese, and in settling your taxes according to Danish regulations. We will make sure that you can concentrate on your work and not on bureaucratic formalities. Contact us for a smooth settlement and to make the most of your tax benefits.
In Denmark, the tax year coincides with the calendar year and runs from January 1 to December 31. Depending on your individual tax liability, as specified in the return sent by the office, your tax return must be filed by May 1 or July 1. In addition, it is possible to make a settlement with the Danish Tax Authority for the last three years backwards.
In the context of the tax settlement, the relevant documents are:
- Arsopgorelse: This is the annual settlement that the Danish tax authority sends. This document shows the income and taxes paid for the year, and includes information about possible tax refunds or the need for a surcharge.
- Lonseddel: This includes monthly or weekly pay stubs.
- Selvangivelse: A tax return form that the tax office issues and sends to the taxpayer's registered address, whether in Poland or Denmark.
- Oplysningsseddel: This is a document attached to the last check that the employer hands over at the end of employment or the tax year. It contains details of income and taxes paid.
There are two types of tax law in Denmark: full and limited.
- Full tax law covers Danish citizens, who are required to pay and account for all taxes within the country.
- Limited tax law, on the other hand, applies to those who are employed in Denmark but reside outside the country, including employees on permanent employment contracts. Such individuals pay taxes in Denmark only on income earned in Denmark, and settle other tax obligations in their country of residence.
Persons residing and working in Denmark for at least 6 months are required to settle their taxes. Before submitting the appropriate application to SKAT (Danish Tax Authority), they should follow several steps:
I. First of all, you need to register with the Danish tax system at SKAT.
II. The next step is to obtain a CPR number, which acts as the equivalent of the Polish NIP and is also necessary for dealing with banks and making appointments with doctors.
III. In addition, you will need to obtain a TASTSELV code through www.skat.dk, which will be used for online tax settlements. The TASTSELV code can only be obtained using a CPR number. If it proves impossible to get a TASTSELV code, you can send your tax return by registered mail, which can extend the time for settlement to 2-3 months. However, most settlements take place on the SKAT website, and a settlement decision is issued immediately.
In Denmark, there is a high tax-free amount of DKK 49,700 in 2024, which is equivalent to about PLN 30,000. In practice, this means that many people with the lowest incomes will not be obliged to pay tax, and they can also count on a larger tax refund from Danish institutions.
In Denmark, every employee, regardless of the amount of income earned, is required to settle the money earned with the Danish tax authority SKAT. SKAT will prepare a preliminary settlement of your tax by March 15 of the following year, for which only any corrections need to be made. Corrections to the returns can be made until May 1 of the year following the year of income, and final corrections can be submitted by July 1. Inaccurate accounting may result in the payment of a tax surcharge. Violation of this obligation may result in financial penalties, the maximum amount of which is up to DKK 5,000.
It is possible to send the tax return either by mail or electronically, using TastSelv/NemId codes. Once the tax office has reviewed your return, you will receive a final settlement, which includes information on whether you will be refunded any overpaid tax or need to pay a surcharge, along with the due date and the office's account number. The excess tax will be transferred to NemKonto, an account designated for transfers from Danish public institutions. Tax refunds that SKAT sends will go to NemKonto, regardless of whether the account is in Poland or Denmark.
Information provided by your employer, bank, unemployment fund and other sources form the basis of your private annual tax return. Be sure to take into account the tax credits you are entitled to on your own. The Danish tax system gives you the opportunity to take advantage of a number of reliefs on your annual tax return. It is possible to deduct expenses related to, for example, housing, commuting to work, running a double farm and even food. These deductions will allow you to reduce the amount of tax due and get a more favorable refund.
If you want to check your tax return on SKAT, just click the “Se årsopgørelsen” option. Green indicates a tax refund, while red indicates an underpayment. You can make changes, including entering tax credits, by clicking “Ret årsopgørelsen / oplysningsskemaet.”
We do not mediate employees' annual tax returns, but we do recommend using experienced tax consultants.
You can take advantage of the following tax deductions, depending on the costs you incur:
- Costs related to food and lodging.
- Commuting expenses, depending on the distance traveled.
- Expenses for travel home.
- Relief related to running a dual household.
- Dues paid to labor unions.
- Interest on mortgages and consumer loans in Poland and Denmark can be deducted if at least 75% of your annual income in a given tax year is from Denmark. If you are married, your spouse's income is also taken into account. In addition, if you want to deduct mortgage interest, you must add 1% of the value of the property.
- The cost of crossing toll bridges, which are available to employees of Danish companies, must be paid by everyone who has to cross a toll bridge to get to work. This depends on the bridge and mode of transportation.
- Paid alimony that has been awarded by the court.
In order to confirm your right to the discounts, you must provide a rental agreement and documents proving that you have rented an apartment in Denmark. Documents proving registration in your home country are also required. In addition, fuel receipts or ferry/airline tickets that confirm travel to and from Poland are essential. You should also provide documents proving that you have a household in your place of permanent residence and a marriage certificate. Other relevant documents include a certificate from the Polish tax office regarding the spouse's earnings. Receipts for the bridge and gates in Denmark are also required. In addition, it is necessary to provide a certificate of paid alimony for the tax year and a court decision on the award of alimony. These documents should be translated by a sworn translator into English or Danish and include confirmations of payments.
In addition, a certificate from the bank regarding the amount of credit interest paid during the tax year under review is also required. This document must contain the following information: details of the borrower, the name of the bank where the loan was taken, the amount of the loan taken, the type of loan (whether it is a consumer loan or a mortgage) and information on the amount of loan interest paid. Translation of this certificate into English or Danish by a sworn translator is also necessary.
If your income is less than DKK 340,800, you are entitled to a maximum deduction of DKK 15,400 in an increased commuting allowance. If your income exceeds DKK 290,800, this deduction is gradually reduced. In addition, you can deduct gifts, donations and contributions made to Danish tax authority-approved charities, foundations, associations, institutions and religious communities.
The relief for cross-border workers is available to individuals who earn at least 75% of their annual income from work in Denmark, and who settle accounts with a spouse who does not earn income in Denmark and whose income in Poland does not exceed DKK 46,700 gross. To qualify for this relief, you will be required to present a marriage certificate on a European form and a certificate from the Polish tax office, translated into English, that confirms both your and your spouse's income.
It is worth remembering that under current regulations, not everyone is entitled to all available tax credits. Therefore, correctness in entering the reliefs is crucial, especially in the context of potential later audits by SKAT.