In general, the rules regarding deductions of travel expenses imply that employees in relation to a work-related trip can either get their expenses reimbursed by the employer as a business expense or make deductions when determining taxable income.Īllowances/deductions can either be based on actual documented expenses or on standard rates. The maximum applies to both the deduction of standard rate and actual expenses but does not affect an employer’s ability to pay tax-free allowances, reimburse the employees expenses, or provide free food and lodging. The right to deduct travel expenses has been maximised to DKK 30,500 annually (2023). The allowance amount depends on the means of transport. Usage of the Øresund connection (the bridge and tunnel between Denmark and Sweden), or the Storebælts connection (the bridge and tunnel between the Island of Funen and Sealand) also entitles one to an extra mileage allowance. For individuals living in certain outskirts, the allowance is DKK 2.19 per kilometre exceeding 120. The deduction in 2023 is DKK 2.19 for 25 to 120 kilometres and DKK 1.10 per kilometre exceeding 120. The distance from home to the place of work and back must be more than 24 kilometres. Travel to and from workĪ deduction is granted for daily travel to and from work, provided the employees are not granted a company car and that the employer does not pay for the transportation. Salary earners may deduct travelling expenses from home to work, travelling expenses necessitated by different workplaces, contributions to unemployment insurance, membership fees to professional trade associations, and union subscriptions.įurthermore, under certain circumstances, salary earners' expenses related to the performance of their work, such as technical literature, work clothes, etc., may be deductible from the taxable income if they exceed a basic amount (DKK 6,700 in 2023). The allowance amounts to 10.65% of the employment income and cannot exceed DKK 45,600 (in 2023). In general, an employment allowance is available for any individual engaged in active employment. The actual effect of a deduction will also vary with the level of local taxes.ĭeductions that have not been taken into consideration in connection with the preliminary tax return and therefore have not led to a reduction of the monthly withheld tax may lead to a refund of tax when the final tax for an income year is assessed.ĭeductions can only be made related to income from sources that are taxable in Denmark, and it is not possible to deduct expenses exceeding the income. A deduction in personal income has a higher tax value than a deduction in taxable income, as only church tax and municipality tax are calculated on taxable income, whereas personal income is subject to the calculation of top tax where almost no deductions are possible. The tax value of a deduction varies depending on in what type of income or in what tax base the deduction can be made. The complex Danish tax system is reflected in a number of possible deductions.
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