Who needs to pay tax?
Everybody who lives and works in Denmark and who has an income is liable to pay tax.
We are all users of the public system, one way or the other. And in principle, we all have to pay towards it. Still, we are taxed individually. The Danish tax system is progressive, meaning that the higher your income, the higher an amount of tax you have to pay.
This also applies if, for instance, you:
- have your own business
- are unemployed and receive benefits from your unemployment fund (daily
benefits) or from the state (social assistance benefits)
- are a student and receive state education grants
- are retired and receive state pension
- work abroad or have income from abroad while living in Denmark
Welfare for all
Tax is one of the cornerstones of the Danish society. In Denmark we have decided
that all of us have to contribute towards the public purse. In return, we are entitled to
a number of public services throughout our lives.
Denmark is a democracy. In practice, Danish citizens have a voice in how the Danish
society, including the welfare and the tax system, is put together by voting for a
politician or a party in the elections.
Even if we find that we pay too much tax, the majority of us also believe that both
individuals and society in general benefit from the tax system.
Denmark is a welfare state, meaning that the tax we pay in the form of income tax,
VAT, duties and customs duties are used for public services provided by the state, the
regions and the municipalities.
The tax funds are used to cover expenses for hospitals, medical care, education, the
police force, the army, public transport and maintenance of infrastructure, etc.
Additionally, the tax funds finance the state education grants (SU), social assistance
benefits and social pensions.
However, you need to pay for certain things yourself, such as medication, textbooks
for higher education or dental care.
The Danish welfare model aims to provide security, affluence and equality of
opportunity for all.
What does SKAT know about you?
SKAT automatically receives most of the information on which the tax calculation of
the majority of individuals is based. Your employer provides information on your pay,
the bank provides information on interest income and expenses, while unemployment
funds and unions provide information on membership fees etc.
As a result, it is very little information you need to provide personally. Often it is
sufficient if you check the information in the statements you receive from SKAT. You
can see your tax information by logging on to E-tax (SKAT self-service facility –
TastSelv) at skat.dk/english (click ‘Log on’ in the top right corner). You log on using
your NemID or E-tax password.
Where to get tax assistance?
agri LIDA cannot give personal advice on taxation issues. If you need tax assistance you can contact the Danish tax authorities. The taxation rules are changing over time and it is therefore the Danish tax authorities -SKAT that can give you up to date information on your taxation. SKAT consists of a main centre and a number of local tax centres all over Denmark.
- Call SKAT on +45 72 22 27 95
- Go to SKAT
- You can also contact your municipal citizen service centre with questions concerning your tax as well as how to change your preliminary income assessment.