Denmark - Tax System
All citizens living and working in Denmark must pay tax and the tax rate in Denmark is one of the highest in the world. The country has a very large public sector which takes charge of many services which in other countries are left to individual to pay for.
Once you have received you CPR number (civil registry number) from the National Registration Office (Folkeregisteret), you must contact your tax office and provide them with your personal data, in order for them to calculate your tax.
They will need the following:
- information about your salary
- proof of purchase of property if relevant
- details of financial situation. Profits, debt, mortgages etc from bank
- identification
Once all this information has been processed you will receive your tax card which your employer needs. If your company does not receive from you not this tax card, they should, according to the law, deduct a full 60% of your salary.
The tax paid in excess will be returned to you when filing your tax.
For information on where your local tax office is and tax in general you can read more in depth information at www.skat.dk if you are fluent in Danish, if not look at the translated pages available in the following languages English, Svenska, Deutsch, Français, Español, Arabic, Farsi, Somalian, Italian.
Expat tax regime
Denmark is one of the few European countries to apply favourable tax rules (and rates) for expatriates. This limited tax is referred to as "the 25% tax regime", and very importantly, must be claimed from the start.
This tax regime is available to foreign researchers and key personnel.
Key personnel are defined as those with a monthly gross salary in excess of DKK 60,100 in 2007 after mandatory contribution to social security to either Denmark (8%) or to the home country (via the EU regulation 1408/71).
The expatriate, to be entitled to apply for the 25% tax regime, must not have been liable to the danish tax system, in any way, at least 5 years prior to moving to Denmark.
You can benefit from this tax regime for a period of 3 years, within a 10 year period, after which you are subject to regular Danish tax regime.
Tax deadline
Denmark tax year begins on 1st of January and ends on 31st of December. The standard deadline for filing a tax return on personal income is end of April the following year.
