The Danish tax system is a rather complex set of rules and regulations. It can be quite confusing for newcomers to understand it all, but it is important to know when and what taxes you have to pay when residing in Denmark.
Taxes are the main source of income for the Danish state, therefore it is each person’s responsibility living in Denmark to know, declare and approve your financial data collected by you with the Danish Tax Administration (SKAT). By that, you ensure that you do not pay too much or too little tax.
SKAT is responsible for ensuring fair and efficient tax funding for the public sector. SKAT provides the necessary services to individuals and businesses by advising on rules and timelines for timely payment of taxes, duties and excise duties. Compliance with these rules prevents illegal things like tax evasion, corruption and bribery, which are severely punished.Details of how to pay taxes in Denmark are available at skat.dk/english or by calling +4572221818
Should everyone pay tax?
Everyone who lives and earns an income in Denmark is subject to tax. This also applies if:
- You are self-employed;
- You are unemployed and receive unemployment benefits from the Danish (A-kasse) or the State Social Assistance (Kontanthjaelp);
- You are a student and receive a scholarship (SU);
- You are retired and receiving a state pension;
- You work abroad or earn income abroad while living in Denmark.
A good welfare system for everyone
For a functional public welfare every resident in the Danish society must contribute to the state budget. In return, each individual has the right to public services.
Tax funds are used to cover hospital treatment, health care, education, police, military, public transport, infrastructure maintenance,tax-funded study grants (SU), social assistance benefits, social pensions and so much more.
The Danish welfare model aims to provide security, well-being and equal opportunities for all.