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TAXES

Danish taxpayers to receive 19.9 billion kroner in rebates

3.7 million taxpayers in Denmark are set to receive 19.1 billion kroner in total as tax rebates are paid out by the Danish Tax Authority in coming days.

tax website in denmark
Danish taxpayers who overpaid in 2021 received rebates on Friday. Photo: Signe Goldmann/Ritzau Scanpix

The total of 19.1 billion kroner works out at an average of 5,435 kroner per person who receives money back in tax rebates because they overpaid in 2021.

The Danish Tax Authority published details of the 2021 tax rebates on Friday, after tax returns were made available online in March.

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

People in the Greater Copenhagen region paid the highest amount of excess tax, while those in South Jutland paid the least, the tax authority said in a statement.

The money is paid directly into current accounts and should appear for most people on Friday, the Danish Tax Authority said.

“We know that many think it’s cause for celebration when they receive their tax rebates. But it’s important to remember that tax rebates mean you paid too much tax during 2021,” Danish Tax Authority vice director Jan Møller Mikkelsen said in the statement.

“My advice to those who receive money today is therefore to check that preliminary tax returns are correct so that you pay neither too much nor too little tax during the course of the year,” Mikkelsen said.

Although many are receiving tax rebates now, it should be noted that tax returns can still be revised until May 1st. This can be done by logging on at skat.dk and checking your income, tax and deduction information.

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

Rebates paid out at the current time are based on changes made by individuals to their tax returns up to and including March 31st.

“In a time with uncertainty and consumer prices that are changing at the fastest rate since 1989, this money will be welcomed by some,” economist Brian Friis Helmer of Arbejdernes Landsbank said in an analysis, as reported by broadcaster DR.

Other taxpayers in Denmark owe money to the state having paid too little in 2021. However, the total amount that must be paid back is considerably lower, at 8.4 billion kroner.

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TAXES

How much less tax will Danish commuters pay in 2023?

Higher tax deduction rates for commuters will be introduced from next year. But how much tax can people who travel to work get back?

How much less tax will Danish commuters pay in 2023?

The interest organisation for motorists, FDM, has criticised new rates for commuter tax deductions, saying the amount by which taxes will actually be reduced will be marginal.

FDM says that higher deduction rates will save commuters an average of 30 kroner – enough to buy around 2 litres of petrol at current prices – per year. The figure comes from the organisation’s own calculations.

It should be noted that the size of the tax deduction changes depending on the distance travelled.

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, car, bus and bicycle 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 other means like rail.

Commuters can claim the deduction if they travel over 24 kilometres to get to and from work over (12 kilometres each way). Travel can be registered and deductions calculated within the forskudsopgørelse or preliminary tax return on the skat.dk website.

READ ALSO: Forskudsopgørelse: Why checking your preliminary Danish tax return matters

An equivalent tax relief, befordringsgodtgørelse, is available to commuters who use their private vehicles for work purposes.

The rates for the two deduction types change depending on the distance travelled. You can see the various rates and compare the 2022 and 2023 on the Danish Tax Authority website.

For example, the tax deduction for trips between 25 and 120 kilometres in 2022 is 2.16 kroner per kilometre. It will increase to 2.19 kroner per kilometre next year.

FDM’s consumer economist Ilyas Dogru told news wire Ritzau the organisation did not understand why the travel deductions “are increasing so slightly”.

The organisation based its calculation on a commute of 50 kilometres per day.

The rates for both types of commuter deduction are determined by government organ Skatterådet, a tax council whose responsibilities include deciding certain subsidy rates.

The Tax Council raised the deduction rates based on higher fuel prices as well as increasing maintenance costs for vehicle owners.

They were last increased in April this year in response to spiralling fuel costs following the Russian invasion of Ukraine. The deduction rates are not normally changed during a tax year.

Costs are expected by the Council to continue to increase, and the deduction rates will therefore go up again in 2023.

But the higher deductions do not cover the increased costs experienced by motorists, FDM argues.

“Commuting is important for the mobility of labour,” Dogru said, adding that people are willing to travel further to work if their transport expenses are more adequately covered.

“When we see higher prices in society, that should be reflected in the commuter deduction. And if the price of fuel falls, on the other hand, that should also be reflected,” he said.

Around 1.2 million taxpayers in Denmark claim tax deductions yearly for commuting or for using their private vehicle for work purposes.

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