Annual tax statement or Tax return
In March 2022, annual tax statements will be sent out to all Danish taxpayers, who receive an automatic tax statement. Pay attention to whether you need to file a Tax return. If you are one of those who are required to file a Tax return and do not, your annual tax statement will most certainly be incorrect, as the Danish Tax authorities will need extra information from you, which they would usually not ask for. It can be an expensive and very cumbersome process.
It can be of huge inconvenience for you if you do not file a tax return when you are covered by the rules with to file a tax return.
Who should file a tax return?
The rules appear from BEK no. 1302 of 14th November 2018 on natural persons' receipt of an annual statement instead of a tax return and they are not easy to understand.
To clarify the rules, you should request a tax return in the below situations. You should only request the tax return if the Tax Administration does not have information about:
- You run or own an independent business, or participate as a co-owner in a business with fewer than 10 owners
- You have income from abroad
- You own a property abroad
- You have income that is completely or partially exempt from withholding tax, except for the Danish pension, which is exempt from withholding tax
- Income earned through personal work in service performed abroad and if a deduction is given in the tax calculation according to Danish rules (e.g., LL §33 and LL§33 A or a double taxation agreement between the country of work and Denmark)
- You run an independent business in Denmark, as a limited taxpayer.
An exception to the rules above is if the Tax authorities has received the information for the most recent income year via the advance statement or your tax folder.
The same applies if the foreign employer has reported your income information to the Tax Administration.
Certain smaller companies that are not liable for VAT or payroll tax and where the income does not constitute 25% of the total personal income and have not saved profits under the business-scheme and provisions provided under the cyclical-equalization-scheme do not have to submit a tax return. The income can be reported via the tax folder, as B - income.
However, you are responsible for checking that the reported amount is correct.
You can ask the Tax Administration before May 1st, 2022, to receive a tax return. You must be registered in the Danish Tax Agency's systems for receiving a tax return. This does not happen if you simply submit an information sheet with the relevant information.
It is a good idea to register as a recipient of a tax return if you are not registered correctly in the Danish Tax Agency's systems.
If you are not registered as a recipient of a tax return before May 1st, 2022, and you still submit a tax return to the Danish Tax Agency via the Tax Folder - the Danish Tax Agency will treat your case as a resumption case according to the Tax Administration Act §26 and §27.
This means that your case needs to be processed and it can take a long processing time. You may have to submit documentation to the Danish Tax Agency that you would not otherwise be asked for.
In addition, it can take an extra-long time before you get repayment of a possible excess tax even if you must pay tax on the same income to another country. If you must pay a residual tax, the Danish Tax authorities will add interest until the residual tax is collected and paid.
Another problem occur in the case that you have paid a voluntary payment and your tax return is not processed. Then the voluntary payment will be treated as an excess tax payment and returned to your account in April. After the case processing, you will once again be charged taxes, with the addition of interest rates etc.
We provide qualified answers to your tax questions. If you are interested in assistance with the calculation of the taxable income, we are happy to be available for a fee by appointment.
Call us on +45 33 32 10 10
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or visit us at www.skatteinform.dk
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We do not assume responsibility for any dispositions made based on this newsletter without prior individual advice. Likewise, we assume no responsibility for any errors and omissions.