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10 Things You Need to Know about Tax in Denmark
- 1. When do You Become Taxable in Denmark
- 2. How to Register in the Danish Tax System
- 3. What is Included in Your Taxable Income
- 4. How Much Tax Do You Need to Pay
- 5. Social Security Network for Work within the EU
- 6. Does Your Company Need Foreign Workers
- 7. Company or Self-Employed
- 8. How to Pay Salary to Yourself as a Major Shareholder
- 9. Securities and Other Activities Abroad
- 10. How to Avoid Double Taxation
- Starting a Business
- Does Your Company Need Foreign Workers?
- COVID 19 - THE DANISH TAX AUTHORITY OFFERS AID PACKAGES FOR YOU AND YOUR BUSINESS
- Larger deductions for companies that need to invest in fixed assets or small assets
3. What is Included in Your Taxable Income
When you are fully liable to pay tax to Denmark, you must include any income earned during the income year. Income from both Denmark and abroad, in other words your global income, must be included. The income that is included in your taxable income is divided into personal income and capital income. Income from shares is not included in your taxable income.
Personal Income Includes
Wage income, income from self-employment, private and social pension income, current payments from pension schemes, unemployment benefits, health benefits, welfare, alimony and child support, educational support, recovered depreciation, profit or loss of goodwill, etc.
Other forms of personal income, which are not capital income or income from shares are also taxable.
Among others, Capital Income Includes
Interest income, dividends from dividend-based units and accumulating units, as well as taxed securities, gains and dividends on certain investment funds, rental income from rental of housing or other capital goods, capital gains, etc.
The tax rate will typically be between 27%, for earnings below 49 700 DKK (2024) and 42%, on gains higher than that threshold.
Income from Shares
Income from shares is not included in your taxable income, but is taxed independently as income from shares.
Income from shares comprises gains and losses, as well as dividends on Danish and foreign equities. This includes distributed equity-based from certain investment funds. Share income is taxed by 27% up to 61 000 DKK (2024) and then 42% of the rest. For spouses, the total amount is 114 400.
Rental of Property
If you have a property abroad or in Denmark, you must pay tax on the profit. The surplus can either be included as business income or as capital income. There is a possibility of special terms for exemption from taxes paid abroad. SkatteInform can help determine revenue and deductibles. We can also help you report the rental income correctly.
*SkatteInform does not take any responsibility for any actions taken based on the information provided in this article, before receiving individual tax advice.
