Standard tax deductions.
We must agree that taxes are high in Denmark. Good thing is that it is a flexible tax system. Self-employed businessmen as well as hired workers in different fields can get deductions from their taxable income.
Personal tax deduction (personfradrag)
All taxpayers in Denmark have personal tax deduction (personfradrag), which is 46,000 DKK a year (in 2018) for people older 18 y.o. and 34,500 DKK for people younger 18 y.o.. This personal tax deduction can be used by every resident in Denmark. It is deducted from the sum of your income, so that this amount is not taxable.
If you don’t work and therefore don’t use your personal tax deduction, then it can be used by your spouse. And your spouse will get more money on hands because the taxable income will be lower due to your personal tax deduction.
Employment tax deduction (beskæftigelses-fradrag)
All working people of Denmark get an Employment tax deduction (beskæftigelsesfradrag), which is 9,50% from income or 34,300 DKK maximum a year (in 2018). Both personal tax deduction and employment tax deduction are filled in automatically by SKAT. But you need to be attentive and fill other tax deductions by yourself in your tax documents according to your financial situation.
Additional Tax Deduction
There are additional tax deductions that you might be entitled to:
- Transportation tax deduction between work and home if the distance in one direction is more than 12 km
- Alimony: The standard alimony is 1,270 DKK per month per child, but you can deduct more if there is a written agreement between the parents
- Interest on debts (consumer loans in banks, mortgage, student debt) – these data automatically received by SKAT from banks and other official organizations at the end of the calendar year;
- Gifts to organizations (charity) – can be deducted from taxes up to 15,900 DKK per year;
- The cost of household chores – håndværkerfradrag (cleaning, repairs, if these services are provided by professional workers), up to 18,000 DKK per person per year.