Deductions - limited tax liabilityIf you live in Sweden and work in Denmark, you automatically have limited tax liability in Denmark. The deductions you are able to make as someone with a limited tax liability are somewhat different to the deductions permitted under the cross-border rule.
This information is for EU citizens only.
If you live in Sweden and work in Denmark, you automatically have limited tax liability in Denmark. If 75% of your total income is earned in Denmark for a period of one year, you can also choose to be taxed according to the cross-border rule. The deductions that you are able to make as someone with a limited tax liability are somewhat different to the deductions permitted under the cross-border rule.
Deductions for limited tax liability:
- Personal allowance - as long as you have worked in Denmark for the entire year. In other cases you can make personal allowance deductions using the so-called full-year conversion.
- Travel deductions (befordringsfradrag) - you can make deductions for travelling between your home and your regular workplace.
- A-kasse (unemployment insurance fund) deductions - this is for those who pay membership fees to an a-kasse, provided that you cannot deduct these from your Swedish declaration.
- Deductions for trade union membership - This applies to those who pay the membership fees to a trade union.
- Pension savings in Sweden - deduction of private pension savings in Sweden, if over 75 percent of your salary income is in Denmark.
The personal allowance is a total of DKK 45,000 (2017) and is deducted from income before municipal and state tax. You must be taxable in Denmark for one full income year to receive the full deduction, otherwise you will be taxed under the cross-border rule. If you are liable for tax in Denmark for parts of the income year, you can choose to do a full-year conversion on your income instead, which will give you your personal allowance. The allowance amount depends on how long you have worked in Denmark. Whether it pays to do a full-year conversion or not depends on your salary.
When you work in Denmark, you have the right to make deductions for transport expenses covering transportation between your home and your place of work. However, this does not apply if your employer pays for your travel. Travel deductions are calculated per working day with a certain amount per kilometre. The deduction is given for all kilometres which exceed 24 kilometres. Therefore, you must travel more than 12 kilometres to your work in order to make use of travel deductions.
Travel deductions per working day (2017):
0-24 km - DKK 0/km
24-120 km - DKK 1.93/km
Over 120 km - DKK 0.97/km
Travel deductions are calculated per kilometre and the number of working days, regardless of the means of transport and the actual expenditure. Holiday days, sickness days and days where you work from home should not be included in the calculation. In other words, only count the days you have actually travelled to your workplace in Denmark. You can also make a deduction for transportation over the Øresund Bridge. If you drive a car, the deduction DKK 50 per passage. For travel by bus or train, the deduction is DKK 8 per passage. If you travel by ferry between Helsingör and Helsingborg special rules apply. See skat.dk/skatoresund for more information.
A-kasse (unemployment insurance fund)
Everyone who pays tax in Denmark can deduct the fees they pay to a Danish a-kasse, provided that they cannot deduct them from their Swedish declaration.
In the same way as with the a-kasse, you can deduct trade union fees (max DKK 6000) in the Danish "årsopgørelsen".
It is provided that 75 percent of your yearly salary income comes from Denmark. The deduction should be made within the amount limits in force in both countries. This means that it is this amount, converted into Danish kroner, that you can deduct in Denmark.