Taxes in Denmark


Taxes in Denmark, Taxation in Denmark, Taxes system in Denmark

Denmark is a country where taxes are among the highest in Europe. The tax system is progressive in Denmark, a very large and includes both direct taxes (including income taxes from individuals and company) and indirect taxes (VAT, excise duties).

As from 1 January 2010 in Denmark began the process planned for the years 2010-2019 a broad tax reform. The new regulations provide for the introduction of lower income taxes and raising taxes and customs duties on products potentially harmful to health or the environment. The reform will be introduced gradually and will be funded by gains from increasing the burden excise taxes and fees in energy consumption, environmental pollution, tobacco, saturated fats, sweets, sweetened drinks, etc.

Tax on corporate income

Receipts from corporate taxes are an average of 8% of total tax revenue in Denmark. Due to the increasing international competition in obtaining foreign investment, Denmark at the turn of successively lowered tax rates on corporate income from 50% to 25% of the force in 2010.

The taxable amount is the total income of the company, including income from capital. The income tax law is equally applicable to limited liability companies and limited liability companies, trade unions and associations. This system is also applied to branches and other permanent representations and the real estate or shares of the total foreign ownership of companies.

All Danish legal entities, as well as branches of foreign companies resident in Denmark are obliged to account for income taxes no later than 6 months after the end of the fiscal year. It is possible to extend the deadline for submission of income tax by the company based on your application.

Corporate revenues in its entirety subject to Danish tax system if they are entities registered in Denmark or foreign companies, whose actual management in Denmark. Total income (including capital income and income from property) permanent representations in Denmark, which trade on behalf of foreign companies not established in Denmark, is taxed under the Danish system of income tax law.

Income of foreign branches of Danish companies are taxable income, including the parent company in Denmark, although it is possible to exclude from taxable income in Denmark's foreign branch.

The tax on personal income

Any person over the age of 15 years and younger than 15 years, if personal income is obtained, is required to file a tax return for the taxable year ending before 1 July, when this term is not extended at the request of the person concerned.

The general rule is a separate accounting for income tax by husband and wife are married. Individuals who as a result of commercial operations receive income only in the territory of Denmark, or receive no income, are required to file a tax return in a simplified form by 1 May after the end of the fiscal year. Citizens of foreign countries with permanent residence in Denmark are subject to the same tax regulations as Danish nationals.

The Danish tax system distinguishes between personal income and limited the total tax liability. Person in total tax liability in Denmark is obliged to pay tax on all income, including capital gains, obtained both in Denmark and abroad. While the person subject to limited tax liability pays tax only on income earned in Denmark.

The basic criteria for determining total or limited tax liability to permanent residence in Denmark, the period of residence, place of employment, place of permanent establishment of the employer, the type obtained salary. The tax liability of a natural dimension to the Danish tax expires on the date the person leaves the territory of Denmark. Citizenship of natural person does not affect the nature of the chargeable held.

Salary and income from capital individuals are subject to progressive taxation. Permitted deductions from taxable income may not exceed 33% of the tax due on income in a tax year. According to the reform of the tax deduction will be limited to 25% by 2019.

The tax on personal income consists of two parts:

- Linear municipal taxes paid to local authorities, varied depending on the region - the average rate is about 25% (average municipal tax rate is 24.09%, while the average church tax rate is 0.73%);
- Progressive tax paid to the State, the rate is dependent on the value of the income:
3.64% for income in excess of the amount of tax-free 42 900, - DKK, plus the income from capital;
In addition, 15% for incomes higher than the amount of 389 900, - DKK, plus the income from capital.

In addition, personal income tax is charged at 8% for the fund employment and 8% of premiums for health insurance.

Value Added Tax (VAT)

In Denmark, a uniform rate of VAT (dun. moms) of 25%. It covers the import and supply of goods and most services. There are reduced rates, preferential or special for selected groups of commodities. There is the list of goods and services exempt from VAT (eg health and social services, education, etc.). Export transactions are not charged VAT.



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