Expatriate tax ebook - Denmark
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Facts and figures
Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation
Pre arrival procedures
Visas and work permits are needed for individuals from some countries - see below.
Employment visas
Citizens of a Nordic Country do not need a work permit. They are free to arrive, live and work in Denmark. Citizens from an EU or EEA nation and Switzerland have to apply for a certificate of registration (registreringsbevis) at the Government Administration (Statsforvaltningen). For citizerns from remaining countries, a work permit is required.
Tax year
The Danish tax year runs from 1 January until 31 December.
Tax returns and compliance
Tax returns must be filed by 1 May the following year. Any shortfall in paid taxes will be collected in three installments: i.e. September, October and November in the year following the income year. Excess tax is reimbursed at the time of the issuance of the annual tax statement.
If the taxpayer has foreign source income, the tax return has to be filed by 1 July the following year.
|
Taxable Income (DKK) |
Rate (depends on the local tax rate) |
|---|---|
| 0-42,900 | 0% |
| 42,900-389,900 | 37.27 % on average (24.9 % municipal tax, 0.7 % church tax, 8 % health care contribution, 3.67 % bottom-bracket tax) |
| Exceeding 389,900 |
52.27 % on average (24.9 % municipal tax, 0.7 % church tax, 8 % health care contribution, 3.67% bottom-bracket tax, and 15 % top bracket tax) |
The tax ceiling is 51.5 % (church tax is not covered by the tax ceiling)
Please note that separate rules exist for calculating the basis for taxable income for local tax purposes and state tax purposes - see the sample income tax calculation below. In addition, only members of the Danish Evangelical Lutheran Church pay church tax, and this tax can therefore be avoided by electing not to pay when registering in Denmark. In 2010, the tax free personal allowance (over 18 years) is DKK 42,900. The effect of the tax free personal allowance is that no taxes should be paid of the first DKK 42,900 taxable income on an annual basis.
Sample income tax calculation
(The example is based on a wage earner who is resident in Copenhagen in 2010 and not a member of the Danish church. The municipal tax rate in Copenhagen is 23.8 %.)
|
Income assessment: |
DKK |
|---|---|
| Salary | 600,000 |
| Car benefit (25 % of value of DKK 300,000) | 75,000 |
| Wage income | 675,000 |
| Social security contribution (8%) | (54,000) |
| Personal income | 621,000 |
Capital income (interest) |
20,000 |
|
Assessment oriented deductions (trade union contribution and unemployment insurance premiums) |
(15,000) |
Employment allowances |
(13,600) |
Taxable income |
612,400 |
| Tax calculation: | DKK |
| Tax to municipality | 135,541 |
| Health care contribution | 45,560 |
| Bottom-bracket tax to the state | 21,951 |
| Top-bracket tax to the state | 34,665 |
| Income tax | 237,678 |
| Social security contribution | 54,000 |
| Total income tax and social security contribution | 291,678 |
Information about Denmark:
Last updated 13 April 2010
This information has been provided by Grant Thornton Denmark, a member firm within Grant Thornton International Ltd and is for informational purposes only. Neither Grant Thornton Denmark nor Grant Thornton International Ltd can guarantee the accuracy, timeliness or completeness of the data contained herein. As such, you should not act on the information without first seeking professional tax advice.
Disclaimer
Contact us
.For further information on expatriate tax services in Denmark, please contact Peter Wied Nellemann or Søren Erenbjerg.