Check your preliminary tax assessment for 2020

The Danish Tax Agency has issued preliminary tax assessments for 2020. Particularly, if you recently relocated to Denmark, you should check that the preliminary tax assessment reflects your expected income and deductions.

In Denmark, individual taxpayers pay preliminary taxes during the same year they earn the income.

For example, your Danish employer is required to withhold taxes when paying salary to you. The employer will pay the withholding taxes to the Danish Tax Agency on your behalf.

Depending on the circumstances, you may also be required to pay preliminary taxes yourself
in addition to the taxes withheld by your Danish employer.

This is the case if you have recently relocated to Denmark from abroad and earn income from foreign sources – e.g. investment income or if you own a rental property abroad.

As the Danish Tax Agency often has no information on this income, you should check your preliminary tax assessment for 2020 and make the required amendments to ensure the preliminary tax assessment reflects your expected income and deductions for the year.

By amending your preliminary tax assessment, you reduce the risk of accumulating interest-bearing residual taxes by the end of the year.

Any preliminary taxes to be paid directly by you are generally collected in 10 monthly instalments during the income year (no instalments are due in the months of June and December).

It is also possible to make a voluntary payment of additional preliminary taxes for the income
year any time during the year.

If you need assistance in reviewing your preliminary tax assessment and amend it if required, BDO can help you.

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge. Please sign up here.