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MONEY

Denmark releases preliminary 2022 tax returns: Three things taxpayers should look out for

Over five million taxpayers in Denmark can from Thursday access their preliminary tax return, or 'forskudsopgørelse' in Danish.

Taxpayers in Denmark can check their preliminary returns from November 18th.
Taxpayers in Denmark can check their preliminary returns from November 18th. Photo: Henning Bagger/Ritzau Scanpix

By logging on to the preliminary return via the skat.dk website, taxpayers can adjust expected income information and tax deductions for the current tax year.

The release of the forskudsopgørelse (preliminary tax return), along with the årsopgørelse (annual return, calculated and displayed on the SKAT website at the beginning of March) are possibly the most important dates on the Danish tax calendar.

You can check how much tax you’ve paid or are due to pay during the course of the year and edit your income and deductions details on the preliminary version of the return, the forskudsopgørelse. 

Tax authorities have asked the public to be sure to check the returns, particularly in cases where income or working situations may have changed as a result of the Covid-19 pandemic.

Working from home, which can impact a tax deduction for commuting, is one relevant example in this context.

For taxpayers in Denmark including foreign residents, it’s worth checking several elements of the forskudopgørelse in plenty of time, enabling you to enter updates where necessary.

Self-employed and employed people alike can adjust their tax returns by entering any updated salary, pension or benefits information, along with deductions to which they might be entitled on their forskudsopgørelse.

The preliminary return forms the basis for the deductions, or amount of income on which tax is not paid, each month.

READ ALSO: Tax in Denmark: Preliminary returns open in November

Travel deduction (kørselsfradrag

If you travel a long distance to get to and from work, you may be entitled to deduct some of your travel expenses from your taxable income.

The travel deduction, or kørselsfradrag, is designed to cover the cost of travelling to and from work over a set minimum distance. It applies to rail and car journeys alike (for cars, the cost of fuel used for commuting comprises the deductible amount).

You can claim the deduction if you travel at total of 24 kilometres to get to and from work (12 kilometres each way, in other words). This only applies on days when you actually travelled from your home to a place of work, and not, for example, for days you spent working from home.

As such, some people now have a lower travel deduction compared to preceding years, with home working more common practice during the Covid-19 pandemic.

The value of the deduction is 26 percent. As such, if you spent 1,000 kroner on travel in a year, your tax bill can be reduced by 260 kroner.

‘A’ and ‘B’ income

‘A’ income usually registered by your employer with the tax authority, with employers declaring your tax details as they are required to do. In other words, your pay lands in your account with tax already deducted.

‘B’ income does not automatically have the relevant deductions tax deductions applied – you have to register this yourself. This could be relevant for freelancers or people who are paid royalties, for example. With B-income, you have to enter the amount you have been paid, or are expecting to receive, and pay tax yourself, usually via online banking.

If you have lost your job or switched jobs, or taken on a second job, it’s worth checking that the change has been registered correctly and in the right place.

READ ALSO: EXPLAINED: How to understand your Danish payslip

Self-employed people must register profits

If you are self-employed, it’s necessary to register changes to expected turnover at your company – which may have been impacted in an unexpected way by the Covid-19 pandemic.

Shutdowns and compensation packages during the earlier stages of the pandemic affected a wide range of sectors in Denmark.

If you have had to close a company, this must also be registered as it will affect your tax return.

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MONEY

Boligstøtte: Who can claim Denmark’s national rent subsidy?

Residents of Denmark can in some cases apply for ‘boligstøtte’ (“housing support”), a reduction on their monthly rent.

Boligstøtte: Who can claim Denmark's national rent subsidy?

What is boligstøtte? 

Boligstøtte is a tax-free sum which people who live in rented housing can – in some cases – qualify for. It provides a subsidy to rent.

The subsidy is available to anyone who rents their home, provided the home meets certain criteria and the household income is under a certain level.

For example, your rental home must have its own kitchen (which would rule out student housing with shared kitchens, termed kollegier in Danish) and you must live permanently in the property.

Homeowners can also be entitled to apply for boligstøtte under certain circumstances. In such cases, the boligstøtte is a loan and not a subsidy, however.

The size of the subsidy – the amount of money you receive each month – depends on the overall income of the household (the total of the incomes of all wage earners at the address), the number of children and adults who live at the address, the amount of rent and the size of the house or apartment.

Boligstøtte is paid out on the first working day of each month.

How do I know if I’m entitled to boligstøtte?

Most people can apply for boligstøtte if they live in rented housing. There are a few living situations that can disqualify you, such as if you live with the owner of the property (including as a tenant) or if you own the property yourself and rent part of it.

You can, however, apply for the subsidy if you live in a property owned by your parents and pay rent to them (known as a forældrekøb – “parent purchase” – in Danish).

You can also apply for boligstøtte if you are sub-letting your house or flat, although the person sub-letting to you might have to change their address in order to avoid their income being taken into account in your application.

People who own their homes can receive bolistøtte (as a subsidy, not as a loan as detailed above) if they receive the state pension folkepension, or disability pension, førtidspension.

How and where do I apply?

You can submit an application via the borger.dk website at this link. The application platform will ask you to submit a rental contract and other documentation for your claim to be processed.

If you’re applying after moving to a new address, you must have registered your change of address with the national personal registry prior to applying. This can be done here. If you apply within 30 days of moving, the subsidy will be effective from the date you moved in. Otherwise, it will count from the first day of the following month from when you submit your application.

The processing time for the application can be up to seven weeks. You’ll receive a confirmation of your application via your Digital Mail inbox, and you will also receive notification here once the application has been processed.

By how much can I reduce my rent?

This depends on the various factors on which your eligibility is calculated – for some, you will not qualify to receive any subsidy at all.

There are five criteria upon which your eligibility – and the amount you receive – is calculated. They are the income of the household; the savings or fortune of people in the household; number of children and adults living at the address; size of the home (in square metres) and amount of rent paid.

You will receive more money if you have more children. For example, people who live in rented homes and are not receiving the state pension can get up to 1,039 kroner per month if they have no children; up to 3,654 kroner per month if they have 1-3 children; and up to 4,568 kroner per month if they have 4 children or more.

The borger.dk website has a tool on which you can estimate your boligstøtte here.

Source: borger.dk

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