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How to claim tax deductions for previous income years

31 March 2016

It is time to prepare your Danish tax return for 2015, but how should you proceed if you forgot to declare deductible expenses on your tax return for 2014 or previous years?

This month, the Danish tax authorities issued statements of taxable income for 2015 for individual tax payers.

You can view your statement of taxable income by logging on to your electronic tax file at the website of the Danish tax authorities.

The statement shows if you are to receive a tax refund or if you will be required to pay additional taxes. You should check whether the statement is correct. Otherwise, you will need to file a tax return in order for the statement to be amended with additional income and/or deductible expenses.

For example, if you are posted to work in Denmark for a temporary period, you may be covered by social security in your home country during you stay in Denmark. Depending on the circumstances, you may be entitled to a tax deduction in Denmark concerning the mandatory contributions you have made to social security in your home country. You should declare this deduction on your Danish tax return.

But how should you proceed if you forgot to declare deductible expenses on your Danish tax return for 2014 or previous income years? Can deductions be claimed for previous years at this point?

Generally, tax assessments for previous years can be amended before 1 May of the fourth year following the income year. Hence, currently, you can request to have your Danish tax assessment amended for the income years 2012, 2013 and 2014. Once past 1 May 2016, you can generally only apply for a revision of you Danish tax assessment for the income years 2013, 2014 and 2015 (the latter by filing a tax return no later than 1 July 2016 if you have foreign source income/expenses).

In most cases, amendments can be declared via your electronic tax file. Once processed by the Danish tax authorities, you will receive a tax refund including interest.

You should note that you are obligated to request amendment of your tax assessment if you have failed to declare taxable income in previous years.

When it comes to the tax authorities' options for amending a tax assessment ex officio, in most cases, the deadlines are the same as described above.

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.