For members


Three things to know about Denmark’s ‘forskudsopgørelse’ preliminary tax return

Over five million taxpayers in Denmark can currently access their preliminary 2023 tax return, or 'forskudsopgørelse' in Danish.

Taxpayers in Denmark can check their preliminary returns from November 18th.
Taxpayers in Denmark can check their preliminary returns from November 18th. Photo: Henning Bagger/Ritzau Scanpix

By logging on to the preliminary return via the website, taxpayers can adjust expected income information and tax deductions for the current tax year.

The release of the forskudsopgørelse (preliminary tax return), along with the årsopgørelse (annual return, calculated and displayed on the SKAT website at the beginning of March) are possibly the most important dates on the Danish tax calendar.

You can check how much tax you’ve paid or are due to pay during the course of the year and edit your income and deductions details on the preliminary version of the return, the forskudsopgørelse. 

Working from home, which can impact a tax deduction for commuting, is one notable area in which corrections can easily be made and impact the amount of tax you pay.

For taxpayers in Denmark including foreign residents, it’s worth checking several elements of the forskudopgørelse in plenty of time, enabling you to enter updates where necessary.

Self-employed and employed people alike can adjust their tax returns by entering any updated salary, pension or benefits information, along with deductions to which they might be entitled on their forskudsopgørelse.

The preliminary return forms the basis for the deductions, or amount of income on which tax is not paid, each month.

READ ALSO: Tax in Denmark: Preliminary returns open in November

Travel deduction (kørselsfradrag

If you travel a long distance to get to and from work, you may be entitled to deduct some of your travel expenses from your taxable income.

The travel deduction, or kørselsfradrag, is designed to cover the cost of travelling to and from work over a set minimum distance. It applies to rail and car journeys alike (for cars, the cost of fuel used for commuting comprises the deductible amount).

You can claim the deduction if you travel at total of 24 kilometres to get to and from work (12 kilometres each way, in other words). This only applies on days when you actually travelled from your home to a place of work, and not, for example, for days you spent working from home.

Some people now have a lower travel deduction compared to preceding years, with home working more common practice since the Covid-19 pandemic.

Earlier in 2022, the government made the unusual move of changing the rates for the deduction during the tax year, in response to rising fuel prices.

READ ALSO: Denmark raises tax deduction for commuters amid high fuel prices

‘A’ and ‘B’ income

‘A’ income usually registered by your employer with the tax authority, with employers declaring your tax details as they are required to do. In other words, your pay lands in your account with tax already deducted.

‘B’ income does not automatically have the relevant deductions tax deductions applied – you have to register this yourself. This could be relevant for freelancers or people who are paid royalties, for example. With B-income, you have to enter the amount you have been paid, or are expecting to receive, and pay tax yourself, usually via online banking.

If you have lost your job or switched jobs, or taken on a second job, it’s worth checking that the change has been registered correctly and in the right place.

READ ALSO: EXPLAINED: How to understand your Danish payslip

Self-employed people must register profits

If you are self-employed, it’s necessary to register changes to expected turnover at your company.

Shutdowns and compensation packages during the earlier stages of the pandemic affected a wide range of sectors in Denmark.

If you have had to close a company, this must also be registered as it will affect your tax return.

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For members


Does Denmark really have the highest tax in the world?

Denmark is known for having having high income tax but is it really the highest tax in the world?

Does Denmark really have the highest tax in the world?

It is well known that Denmark is a country of high taxes but during the election last year, several politicians complained that Denmark’s tax was the highest in the world.

“We are the world’s most heavily taxed country”, said Liberal’s (Venstre) party leader, Jakob Ellemann-Jensen, during a debate between prime ministerial candidates on DR in October 2022.

Then-leader of the Nye Borgerlige party leader, Pernille Vermund, made a similar point on Twitter, writing “we live in a country with the world’s highest tax burden”, in a post about failures in nursing homes.

More recently, the libertarian opposition party Liberal Alliance has also pushed the line that taxpayers are subject to a higher rate in Denmark than in any other country.

Politicians and parties making this assertion typically refer to the fact that the OECD (Organisation for Economic Co-operation and Development) has listed Denmark as the highest tax country for several years.

The most recent OECD report listed Denmark as top, followed by France, Belgium, Italy and Sweden.

But some economists disagree with the way tax is assessed in these world rankings, which makes Denmark’s tax system appear more extreme than it is.

How much do people in Denmark pay in tax?

A salary in Denmark will include the following deductions: Labour market tax (AM-bidrag 8%), State tax (bundskat 12%), Municipality tax (kommuneskat 25%), 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 45.1 percent will be taxed, and 94.65 will go towards the state pension, giving you a total of 24,884.85 kroner per month (3,340 euros per month) after deductions. 

Various tax deductions can result in this amount being reduced.

READ MORE: What salary can you expect to earn in Denmark?

Why is Denmark so high in the world rankings?

Analysis from Denmark’s economic-political thinktank Economic Council of the Labour Movement (Arbejderbevægelsens Erhvervsråd, AE) shows that some key factors are missing in the OECD calculations of countries’ tax burdens.

“The tax burden is the amount of personal income a typical person is meant to hand over to a government and the total income in society administered by the government,” AE’s chief analyst Jon Nielsen told The Local.

“The OECD calculates the tax-to-GDP ratio but that is not a good reflection of the tax burden for two main reasons.

“Firstly, the calculations include taxes on social benefits. Tax collected on social benefits is not income that shifts from the hands of citizens to government, it is income shifted from one area of government to another.

“In 1994, public pensions became taxed, so the tax-to-GDP ratio rose without the government getting higher revenue, or citizens getting lower disposable income, because benefits were set up to compensate people. So if you compare countries where social benefits are fully or partly taxed, we need a correction to make the comparison accurate,” Nielsen said.

This situation was noted by Statistics Denmark in its report ‘Taxes and Charges’ 2022.

“The second correction needed is that we should be using gross domestic income (GDI) to compare countries and not gross domestic product (GDP). GDP measures how much value is created within Denmark’s borders but a lot of Danish income now comes from abroad,” Nielsen told The Local.

“During the last thirty years, globalisation has set in and more income has come from assets abroad, for example through pension funds. If you include that income, the Danish tax burden is reduced,” Nielsen said.

If you take those factors into account, Denmark drops to fifth place among the OECD countries, an AE analysis concluded.

“The myth that we the have the highest taxes in the world makes people think of Denmark as somewhere exclusively highly taxed and an international exception, but we are not. We are in the higher ranks of course but there is nothing special about Denmark and high taxes,” Nielsen told The Local.

Is Denmark’s tax too high?

Politicians who favour lower taxes in Denmark might argue that the analysis by AE doesn’t change anything. 

“I have no doubt that there is more than one way to calculate the tax burden. But even if you use AE’s figures, it does not change the fact that the tax burden is very high in Denmark. Fifth place is also high,” the Conservative mayor of Lyngby-Taarbæk municipality, Sofia Osmani, told newspaper Politiken in October 2022.

AE’s chief analyst Nielsen argued that Denmark’s tax system is what provides an equal society.

“You can’t say that countries with high taxes are more expensive to live in. The fact that healthcare, childcare and education are financed by the tax system, means that the personal amount you have to spend on those items is less than in other countries,” Nielsen said to The Local.

“Denmark’s taxes are one of the reasons we have such an equal and highly productive society, where the general education level is high, the infrastructure works well and spending on research and development is high. The fact that we have high taxes is a key reason why our welfare system produces these equal and fair opportunities for all,” Nielsen said.

READ ALSO: How will new Danish government change income tax?