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TAXES

Årsopgørelse: What you need to know as Denmark releases annual tax return

Denmark’s tax authority Skat released the country’s annual personal tax returns on Monday, resulting in thousands across the country queuing online to check their details.

skat.dk website on screen
Denmark's annual personal tax returns, årsopgørelse, were released on Monday March 14th. Photo: Signe Goldmann/Ritzau Scanpix

Although Monday is the official day for release of personal tax returns – årsopgørelse in Danish – some of the returns were published on the Skat.dk website from Friday evening.

That resulted in long queues online, with up to half a million people on the tax agency’s website on Saturday morning.

No queues to log in were ongoing as of Monday afternoon.

The årsopgørelse is calculated and displayed on the SKAT website at the beginning of March, after which taxpayers can edit their tax information, such as by changing income or tax exemption information. Details must be updated within a set deadline, which falls at the beginning of May.

Around three out of four taxpayers in Denmark get refunds after the yearly annual return. The amount refunded varies from person to person although many others have to pay money back to the tax authority.

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In 2022, taxpayers are advised to particularly check that details relating to any commuting subsidy (kørselsfradrag) are entered correctly.

This is because the relevant information must be entered manually, due to a change introduced due to changes to commuter patterns caused by home working recommendations during the Covid-19 pandemic.

The commuter deduction, termed kørselsfradraget in Danish, 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.

Commuters can claim the deduction if they travel over 24 kilometres to get to and from work over (12 kilometres each way). 

READ ALSO: Denmark’s tax authority considers commuter subsidy over high fuel prices

The tax authority, Skattestyrelsen, registered 40,000 fewer claims for the subsidy between 2019 and 2020, news wire Ritzau reported.

“I think that happened because there were many people who thought it automatically came with the forskudsopgørelse [the preliminary version of the return released in November, ed.],” Henning Boye Hansen, tax specialist and senior consultant with accountancy firm BDO, told Ritzau.

“If there are 40,000 Danes who have forgotten their commuter subsidy on their annual returns, we are talking about 400 million kroner in subsidies that people didn’t get last year,” he said.

The 40,000 may not all have forgotten to input their subsidies – some may no longer qualify for it.

Like with transport, taxpayers can get a deduction for the cost of food and accommodation (such as hotel stays) from your tax bill, if these are incurred when you stay away from home for work – termed kost og logi in the Danish tax system. These subsidies must also be entered in the annual return.

A string of other applicable deductions can also be checked, edited and entered in the annual return. These include (but are not limited to) work equipment (if bought for work use only), unemployment insurance (A-kasse) and union membership fees, and donations to charity.

A deduction for home improvements, the håndværkerfradrag, is to be scrapped after April 1st under the terms of the 2022 budget, but can still be applied up to that date.

Other tax deductions that can be applied for home services, including cleaning and childcare, are retained.

READ ALSO: Four ways to (legally) lower your tax bill in Denmark

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TAXES

Denmark raises tax deduction for commuters amid high fuel prices

The Danish government’s tax council on Tuesday decided to increase the rate for tax deductions given to commuters, due to high fuel prices.

Denmark raises tax deduction for commuters amid high fuel prices

The government organ Skatterådet, a tax council whose responsibilities include deciding certain subsidy rates, agreed on Tuesday to increase a tax deduction given to commuters who travel over a certain distance to work.

People who travel between 25 and 120 kilometres to and from work will now be able to claim 2.16 kroner for each kilometre they travel. That is an increase of 18 øre (0.18 kroner) on the existing rate.

The decision was confirmed my Skatterådet in a press statement.

The commuter deduction, termed kørselsfradraget in Danish, 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. The deduction is always calculated based on kilometres travelled if the journey was made by car, even if it was actually made by train.

Commuters can claim the deduction if they travel over 24 kilometres to get to and from work over (12 kilometres each way). 

An equivalent tax deduction for commuters who use their private vehicles to get to work, the befordringsgodtgørelse, will also be subject to increased rates settled on by the tax council, with the rate raised by 19 øre to 3.70 kroner per kilometre, though this will not be applied retroactively through the tax year.

READ ALSO: Four ways to (legally) lower your tax bill in Denmark

Only twice previously in the last 20 years have the tax deductions been extraordinarily changed in the middle of the tax year, Skatterådet said in the statement.

They are usually set in November based on projections of the price of fuel throughout the coming year.

Recent months have seen the cost of both petrol and diesel increase significantly, caused in part by the Russian invasion of Ukraine.

Prime Minister Metter Frederiksen earlier this week said she wanted the tax subsidies to be raised, while the opposition Liberal party also backed the decision in comments to news wire Ritzau. Liberal tax spokesperson Louise Schack Elholm said “We would naturally have like it to be more. But this was what could be managed”.

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