Final Danish Tax Return (“selvangivelse”)
For a tax resident individual a final tax return must be filed every year showing your worldwide income and the value of your non Danish assets.
Tax residents are subject to State taxes and a municipality tax. The State tax depends on the size of income whereas the size Municipality tax depends on which municipality you live with taxes varying from 16-22% check. Further a State church tax is levied unless the individual requests not to be member of the Danish State church.
For a non-tax resident individual with limited tax liability on income from Danish sources a final tax must also as a basis be filed. Only in special cases a tax return is not to be filed. That is the case e.g. if you only have dividend income from Danish companies, if you are subject to special work force hire taxation or hydro carbon taxation.
For limited tax liable individuals the State tax rates are the same as for tax residents whereas the Municipality tax does not relate to a certain Municipality but is an average Municipality tax.
Special tax rules are applicable in the year of entrance into or cessation of Danish taxation.
Special rules also apply in a tax year with combined taxation as limited tax liable for one period and taxation as tax resident for another period in the same year. In such years two tax returns must be submitted.
The calculation of the basis for the income taxation (the taxable income) is complicated and the calculation of the income tax liability is near to impossible to understand for others than tax specialists.
Choices to obtain tax savings exist but are regularly not applied for individuals with cross border tax issues due to the fact that the options are not seen or understood.
The tax year is normally the calendar year.
The filing deadline is 1 May unless extension is granted to 1 July due to complicated income tax situations e.g. business income or request for extension.
The filing must be made electronically unless hard copy filing is granted.
Assistance and advice from a professional tax advisor is normally recommended for non-Danes and for Danes with complicated tax issues including individuals with cross border issues and complicated transactions and investments.
Inwema provides professional tax return completion services and is very experienced and fully updated in doing so. Please contact us at info@inwema.dk or phone no +45 3169 3169.
