Deductions - taxation under the cross-border rule
Deductions when you are taxed under the cross-border rule
If you are taxed according to the cross-border rule, you can make the same deductions as if you lived in Denmark. However, Danish Skattestyrelsen does not have the right to tax any other income, as you are not a resident in Denmark.
The border passage rule gives you the right to the following deductions:
- Personal allowance - you get a so-called personfradrag in the same way as all other people who live and work in Denmark
- Joint taxation - if you have a spouse who has an income below DKK 48.000 (2023) per year and you live together
- Travel deductions
- Deductions for a-kasse (unemployment insurance fund) fees
- Deductions for trade union fees
- Danish private pension savings
- Deduction for interest on Swedish loans and student loans
- Deduction for spousal alimony and child support payments
- Deduction for gifts to certain charity
- Deduction for housing job scheme
What are the deductions under the cross-border rule?
In Denmark you have a basic deduction (personfradrag), which is deducted from your income before state and municipal tax is deducted. For the 2023 income year the deduction is DKK 48.000. You can also choose to be jointly-taxed with your spouse if he/she have little or no income. This means that your income is put together with that of your husband or wife. In that way you can access their unused basic deduction allowance.
If you work in Denmark you can make a deduction for travel between your home and workplace as long as you pay your travel expenses yourself, and your employer does not pay your travel expenses. The amount of the deduction is calculated per working day at a certain amount per kilometer and only for the days that you actually travelled to work. You are only able to make a deduction for kilometers over 24 kilometrers per day. Therefore, you must travel more than 12 kilometers to your work for a one-way trip to be able to benefit from travel deductions.
Travel deductions per working day (2023):
0-24 km - DKK 0.00/km
25-120 km - DKK 2,16/km
Over 120 km - DKK 1,10/km
0-24 km - DKK 0.00/km
25-120 km - DKK 2,10/km
Over 120 km - DKK 1,08/km
Travel deductions are calculated per kilometer 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 is 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.
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 the membership fees to a trade union (max DKK 6.000).
Those who are taxed according to the cross-border rule can make deductions for contributions to pension insurance. You do not need to include employer registered pension schemes in your Danish declaration because these are deducted automatically. However, you can make deductions for private pension payments in Denmark, provided that 75% of your annual salary income is in Denmark.
Spousal alimony and child support payments
You can get a deduction for paid support to a previous spouse in case you have separated or divorced, and on a part of previous child support for children under the age of 18. The deduction is conditioned on it having been decided by a Danish or foreign public administration.
Gifts to certain charities
It is possible to get a deduction for gifts to certain charities, if these are reported to Skattestyrelsen.
Housing job scheme (service deduction/craftsman deduction)
The service deduction scheme allows for deductions to be made to services in the home, while craftsman services labelled “green” (med grønt sigte) are eligible for a craftsman deduction.
When you are taxed under the border passage rule, you can make deductions for your own share of personal net interest expenses on loans.