Your Guide to Expatriate Tax Deductions in Denmark

Denmark is a popular spot for expatriates from around the globe, due to a combination of its stunning scenery and high quality of living. 

If you have moved to Denmark as an expat, it would not be unusually for you to feel unsure of the local tax rules.

However, understanding available deductions that you can claim can be crucial come tax season.

Why? Because it can mean the difference between owing tax and receiving a Danish tax refund!

Let's delve into the key aspects of Denmark expatriate tax and how deductions can benefit you.

Is my income in Denmark taxable?

Most expats in Denmark will have to pay tax on income they received during their stay. 

This is usually income from employment and work performed in Denmark and for a Danish employer.

This income will usually include your salary, any overtime you earn, bonuses, as well as some benefits.

Your employment is taxed through your employer and by the 30 April of the following year you will automatically receive the assessment notice of the Danish Tax Authorities called Årsopgørelse.

What is an expat for tax purposes?

An expatriate refers to an individual living outside their native country. 

However, for tax purposes, the definition can vary. 

In Denmark, you may be classified as an expatriate for tax purposes depending on factors related to your personal circumstances. 

These include your intention to stay or leave, as well as the source of income. 

CLAIM YOUR DANISH TAX REFUND

What are tax deductions for expats in Denmark?

Expatriates in Denmark are eligible for various tax deductions, offering opportunities to reduce taxable income. 

These deductions encompass a spectrum of expenses, including housing allowances, relocation costs, and work-related expenditures like clothing, professional literature, etc.

Housing allowances, specifically, can significantly impact an expatriate’s tax liabilities, providing relief by lowering taxable income.

How can I reduce my tax in Denmark?

There are several ways you can help to minimize tax burdens in Denmark. 

You may be able to avail of tax deductions that can offset any tax liability you may have, or even mean you can apply for a Danish tax refund!

Food and lodgment

To be able to claim relief on food and lodgement, there are certain conditions you must meet:

• You must have a temporary workplace

• The distance between your temporary place of work and your usual place of residence must be so great that you cannot spend the night at your place of residence and travel back and forth every day.

You should keep your primary household and establish another one in Denmark.

You cannot get a deduction for board and lodging if:

• your employer pays a tax-free travel allowance or covers your expenses on account.

• you get a deduction for double housing.

Double taxation agreements

Double taxation is a concern for many expatriates, and it occurs when the same income is taxed in multiple jurisdictions. 

Denmark has double taxation agreements with numerous countries, aiming to prevent this issue from occurring. 

You should check with the tax office of your specific country to see what the Danish double tax treaty guidelines are for you.

CLAIM YOUR DANISH TAX REFUND

How Taxback can help you

Navigating tax as an expatriate can be very tricky, with lots of different rules and regulations to abide by.

However, the team at Taxback have an in-depth knowledge of Danish tax, and we will leverage any tax deductions to positively impact your financial well-being while ensuring compliance with Danish tax laws!

In other words, we’ll keep you tax-compliant while ensuring you get your MAXIMUM Danish tax refund!

We even have a free-to-use Danish refund calculator. Check it out now!