Taxation in Denmark

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skatWelfare for all.

The Danish welfare state is, among other things, based on the concept of citizens having equal access to the different services paid for by taxes. 

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 is 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.

Who needs to pay tax?

Everybody who lives and works in Denmark and who has an income is liable to pay tax.

  • 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 pension(s)
  •  work abroad or have income from abroad while living in Denmark.

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 principle is reflected in the proverb: “Those with the broadest shoulders should
bear the heaviest burden”.

Personal assistance by appointment only, contact SKAT

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