TAX SYSTEM
The Danish tax system is progressive. This means that the higher your income, the more taxes you must pay. The tax you pay go to finance the public school system, the hospitals, the roads etc.
The Danish Tax Agency (Skattestyrelsen) will automatically receive most of the information required to determine the tax for most tax payers.This means that you can rely on your employer has provided the necessary information about your salary, that your bank has provided information about interest information and expenses, and unemployment funds, unions and ngo’s have provided information about your membership payments etc.
Your job is to check the correctness of the information stated in the documents that you receive from SKAT.
SKAT sends three important mails per year to everyone living in Denmark: You will receive these mails in your in your inbox at skat.dk.
- Forskudsopgørelsen (preliminary income assessment)
This letter you receive in November. The information is based on the information that SKAT has from previous years. It is always a good idea to check to see if the numbers are correct. If you need to make changes you can do it online and you will receive a new tax card based on the changes. These changes will automatically be sent to your employer or other parties.
- Selvangivelsen (income tax return)
- In February you will receive your income tax return for the past year. Now it is time to check whether the numbers included in this document are correct and if not you should make the necessary corrections.
- Årsopgørelsen (annual tax statement)
By the end of April you will receive your annual tax statement which is based on the income tax return and your changes to this document.
To read much more about tax and deadline – Tax calendar: https://www.skat.dk/skat.aspx?oid=2244285&ik_navn=subtree
A flat tax rate of 27% (32,84% including the AM tax) for up to five years, how?
You might be able to apply for the expat scheme if you meet the following conditions
- Minimum salary – The salary before AM tax including the value of free company car and value of free phone must constitute at least 63,794,65 DKK each month (2017) as an average within a calendar year. The salary requirement is normally adjusted every 1 January.
- Danish employer
- Tax liability – No tax liability in Denmark for 10 years before using the tax regime is allowed.
- Work in Denmark
You must notify the Danish tax authorities if you wish to use the expat scheme. You can read much more here:
https://www.skat.dk/skat.aspx?oid=107036&chk=215693
Tax exemption
If you are from a country that has signed a double taxation convention with Denmark and come to Denmark to work as a researcher you might be able to get a tax exemption. Your workplace myst apply for a tax exemption. You will still have to pay ATP (labour market supplementary fund) even though you are exempted from paying tax.
Here is ALL you need to know about the Danish tax system: https://www.skat.dk/getfile.aspx?id=137550
There are many different kinds of tax that you pay while working in Denmark: A-tax, state tax, municipal tax, church tax, labour market contributions (AM-bidrag) etc.
Please note that regardless of whether you are subject to limited or full tax liability you must pay 8% labour market contributions (am-bidrag).