EXPLAINED: How does Denmark’s tax deduction for commuting work?
The most common deduction for taxpayers in Denmark is the 'kørselsfradrag' or commuter deduction. What is it exactly and how does it work?
The commuter deduction, termed kørselsfradraget (sometimes also called befordringsfradrag) in Danish, is a tax deduction applicable for people who commute more than 24 kilometres to and from work.
The tax deduction 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 although it is always calculated based on kilometres travelled if the journey was made by car, even if it was actually made by train.
You can claim the deduction if you travel over 24 kilometres to get to and from work over (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.
The amount you get back on your tax payments depends on how far you commute and where in Denmark the commute takes place.
For journeys from 25-120 kilometres, the deduction (for the 2023 tax year) is 2.19 kroner per kilometre. Over 120, kilometres, this rate decreases to 1.10 kroner per kilometre. However, 25 so-called “outer municipalities” as well as rural small islands are exempted from this and retain the higher rate for longer journeys.
In 2024, these rates change with two different deductions applied at 25-120 kilometres: 2.23 kroner per kilometre as the general rate and 2.47 kroner per kilometre for outer municipalities. Over 120, kilometres, this rate decreases to 1.12 kroner per kilometre unless in the outer municipalities, where it does not change.
The “outer municipalities” are Bornholm, Brønderslev, Frederikshavn, Faaborg-Midtfyn, Guldborgsund, Hjørring, Jammerbugt, Langeland, Lolland, Læsø, Morsø, Norddjurs, Odsherred, Samsø, Skive, Slagelse, Struer, Svendborg, Sønderborg, Thisted, Tønder, Vesthimmerland, Vordingborg, Ærø and Aabenraa.
Lower rates are available to people who use their bicycles, scooters, mopeds or similar. They can be seen here.
The deduction is not paid out to commuters but is calculated in the annual tax statement (årsopgørelse).
This means that taxpayers must enter correct information about their commutes into their personal tax statement. This can be done in two ways: via the preliminary version of the return, the forskudsopgørelse, or in the annual return, the årsopgørelse, which is released in March.
In 2024, the Danish Tax Agency released annual tax statements for the first time in English as well as Danish, allowing foreign residents to more easily navigate the tax portal and enter their information.
READ ALSO: How you can access (and edit) your 2024 Danish tax return in English
A different tax relief, the befordringsgodtgørelse, is available for people who use their private vehicles for work purposes (i.e., not commuting alone).
Commuters who use their own vehicle for work can claim 3.73 kroner per kilometre back (2023 rate) in tax for up to 20,000 kilometres. Once 20,000 kilometres has been passed, the relief is 2.19 kroner per kilometre.
Employers are required to check that private vehicles are actually being used for their jobs by staff who are claiming the tax relief.
Unlike with kørselsfradrag, the befordringsgodtgørelse is paid out to eligible taxpayers (rather than being integrated into the tax return). The payment itself is tax free.
Some 317,000 people edited their commuter deduction for 2023 within the first three days of the annual statement’s release on March 8th 2024, according to the Danish Tax Agency.
READ ALSO:
- IN NUMBERS: How much are you likely to get paid back in your Danish tax assessment?
- The essential tips to help navigate your Danish tax assessment
While the majority of tax information, such as salary and other income, is provided to the Tax Agency by employers and other agencies, taxpayers must enter their commuting information themselves.
The deduction for commuting is the one Danish taxpayers are most commonly eligible for, Jan Møller Mikkelsen, Deputy Director General at the Danish Tax Agency, previously told news wire Ritzau.
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The commuter deduction, termed kørselsfradraget (sometimes also called befordringsfradrag) in Danish, is a tax deduction applicable for people who commute more than 24 kilometres to and from work.
The tax deduction 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 although it is always calculated based on kilometres travelled if the journey was made by car, even if it was actually made by train.
You can claim the deduction if you travel over 24 kilometres to get to and from work over (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.
The amount you get back on your tax payments depends on how far you commute and where in Denmark the commute takes place.
For journeys from 25-120 kilometres, the deduction (for the 2023 tax year) is 2.19 kroner per kilometre. Over 120, kilometres, this rate decreases to 1.10 kroner per kilometre. However, 25 so-called “outer municipalities” as well as rural small islands are exempted from this and retain the higher rate for longer journeys.
In 2024, these rates change with two different deductions applied at 25-120 kilometres: 2.23 kroner per kilometre as the general rate and 2.47 kroner per kilometre for outer municipalities. Over 120, kilometres, this rate decreases to 1.12 kroner per kilometre unless in the outer municipalities, where it does not change.
The “outer municipalities” are Bornholm, Brønderslev, Frederikshavn, Faaborg-Midtfyn, Guldborgsund, Hjørring, Jammerbugt, Langeland, Lolland, Læsø, Morsø, Norddjurs, Odsherred, Samsø, Skive, Slagelse, Struer, Svendborg, Sønderborg, Thisted, Tønder, Vesthimmerland, Vordingborg, Ærø and Aabenraa.
Lower rates are available to people who use their bicycles, scooters, mopeds or similar. They can be seen here.
The deduction is not paid out to commuters but is calculated in the annual tax statement (årsopgørelse).
This means that taxpayers must enter correct information about their commutes into their personal tax statement. This can be done in two ways: via the preliminary version of the return, the forskudsopgørelse, or in the annual return, the årsopgørelse, which is released in March.
In 2024, the Danish Tax Agency released annual tax statements for the first time in English as well as Danish, allowing foreign residents to more easily navigate the tax portal and enter their information.
READ ALSO: How you can access (and edit) your 2024 Danish tax return in English
A different tax relief, the befordringsgodtgørelse, is available for people who use their private vehicles for work purposes (i.e., not commuting alone).
Commuters who use their own vehicle for work can claim 3.73 kroner per kilometre back (2023 rate) in tax for up to 20,000 kilometres. Once 20,000 kilometres has been passed, the relief is 2.19 kroner per kilometre.
Employers are required to check that private vehicles are actually being used for their jobs by staff who are claiming the tax relief.
Unlike with kørselsfradrag, the befordringsgodtgørelse is paid out to eligible taxpayers (rather than being integrated into the tax return). The payment itself is tax free.
Some 317,000 people edited their commuter deduction for 2023 within the first three days of the annual statement’s release on March 8th 2024, according to the Danish Tax Agency.
READ ALSO:
- IN NUMBERS: How much are you likely to get paid back in your Danish tax assessment?
- The essential tips to help navigate your Danish tax assessment
While the majority of tax information, such as salary and other income, is provided to the Tax Agency by employers and other agencies, taxpayers must enter their commuting information themselves.
The deduction for commuting is the one Danish taxpayers are most commonly eligible for, Jan Møller Mikkelsen, Deputy Director General at the Danish Tax Agency, previously told news wire Ritzau.
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