In Denmark, all services such as schools, hospitals, day care, nursing homes, etc. are paid for through taxation.
The Danish tax system has two types of taxation – direct and indirect.
Direct taxes are applied to a wage earner's income:
- Church tax (the only optional tax)
- Municipal tax
- Health Service contribution
- State tax (three tax brackets: bottom, middle and top).
Indirect taxes include taxes and duties on goods and services, such as VAT, customs and excise duties and green taxes.
Tax Card (Skattekort)
When you start to work in Denmark, you have to register to get an e-tax card (e-skattekort).
Citizens of Nordic Countries
As tax is deducted at source by your employer, the accounting department will need your tax card to know how much to deduct. If your employer does not have your tax card, they have the right to deduct 60% from your salary.
A tax card consists of two parts: A tax rate and deduction card (hovedkort) and a secondary card (bikort). Your tax card is sent electronically to your employer. The information he receives tells him how much tax to deduct at source.
The tax rate and deduction card (hovedkort) includes your personal allowances and deductions, and withholding rate (a percentage, called 'trækprocent') for the tax year.
Your will only need the secondary card if you have more than one Danish employer.
A preliminary tax statement (forskudsopgørelse) will be created, based on your income information.
Your preliminary tax statement also includes a code to the Self-Key (TastSelv) service you can use to access your electronic tax folder.
You will receive an annual tax statement in March/April. The annual tax statement includes the figures known to SKAT for the preceding tax year. You are asked to check that the figures on the tax statement match the figures returned to you by your employer, bank, etc. including transport allowance (if applicable).
If the figures are correct – no further action is required and the annual tax statement is your final tax statement.
If figures are incorrect or missing, you must correct your annual tax statement electronically. To do this, go to SKAT's self service page :www.skat.dk – TastSelv – Access self service (TastSelv) – enter your Citizen Registration number (CPR) and self-service (TastSelv) code – Click ”Change annual tax statement” (Ændre årsopgørelse).
If you have made changes, you will receive a new annual tax statement. This statement will be your final tax statement for the year.
On your final tax statement, you can see if you have paid too little or too much tax in the previous year.
Overpaid tax will be refunded to your NemKonto Easy Account.
If you have paid too little tax, you will be asked to pay the outstanding amount. Outstanding tax must be paid within a specified period. The deadline is given on the statement.
Special tax regulations apply to border commuters. See www.skat.dk, www.pendlerinfo.org and www.workindenmark.dk
Note: If your income changes significantly or if you buy a house, take out a loan, etc, you must provide SKAT with this information. You will then receive a new tax card.
It is also important that you inform SKAT when you leave Denmark.