Citizen in Denmark - Ny i Danmark

The Danish tax systemEveryone pays taxEveryone who lives in Denmark must pay tax if they receivean income. This also applies if you are:• Unemployed and receive cash benefit from the stateor unemployment benefit from your unemploymentfund.• A student and receive SU, the state education grantsand loan scheme.• A pensioner who receives a state pension.• Work abroad or have an income from abroad but livein Denmark.• Have your own business.To the state and the municipal authoritiesThe Danish tax system works in such a way that all privatepersons pay income tax to the state and municipal authorities.If you are a homeowner you must pay property tax.Members of the Danish National Church have to pay churchtax. Companies have to pay corporate tax. If you have acapital income, from securities for example, you have topay tax on these as well.Indirect taxesIn addition to income tax, we also pay indirect taxes in theform of VAT every time we buy a product or service. Wealso pay tax on a number of goods such as cars, petrol,alcohol and tobacco.Possibilities for allowanceSome costs can be deducted from income before the taxauthorities calculate your tax contribution.These include interest costs on debts, trade union membershipcosts, unemployment insurance and child maintenance, andtransport costs in connection with work. The latter, however,will depend on how far you have to your place of work. Inaddition, you will receive a personal tax allowance which isnot linked to any particular cost.Tax returnIf you are an employee, your tax will automatically bededucted at source before you receive your salary.Every year you must complete a tax return which containsinformation about your income and the allowances towhich you are entitled. You will receive your tax return inMarch, and if you have any changes to make, you musthand it in no later than 1 May. You can make changes usinga form that accompanies the tax return, and send it off toSKAT. You can also make changes over the phone or theInternet at www.skat.dk.Later, you will get an annual tax return which indicates howmuch tax you have paid and whether you have to makean additional payment or whether you are entitled to atax refund.ECONOMY AND CONSUMPTION117