A prominent North European country, Denmark is known for its natural landscape, which consists of numerous islands. The country’s labor market is one of the most flexible in the entire Europe. In fact, its labor market flexibility can be matched with that of the United States. Labor market flexibility is one of the factors that attract overseas people to this country and over the decades, Denmark has proved that it is a welcoming society, where there is place for immigrants. A good 9.5 percent population of the country’s total over 5.4 million is immigrants or descendant of immigrants.
Being a welfare society, Denmark has world’s one of the highest tax rate regimes. The country’s lawmakers ensure the welfare of its communities with the help of the taxes collected from the citizens. The high income tax rate is also the result of the fact that Denmark has a very large public sector.
The best thing in Denmark is that its public sector takes care of many things that citizens in other countries have to pay for themselves. Danish citizens have equal access to the public services. Thus, Danish society requires a lot of money for its smooth running and this is why the high tax rate!
SKAT is the authority that executes the Danish tax system. It issues tax cards and collects taxes, alongside providing the citizens the information on allowances and tax deductions, dual tax liability, and many more. Those who are entitled to pay tax are required to obtain the tax card from SKAT. The card contains CPR number or the tax ID number. Besides, it has the address the tax payer; the percentage of tax that the employer is required to deduct from the tax payer’s salary; tax allowances and deductions; and the date from which the tax card is valid.
The Danish tax card is an e-card. Once the tax payer is registered with SKAT, the employer of the tax payer can access information about the taxation percentage electronically through the tax card. This card is divided into two parts- a primary card and a secondary card. Even though both the cards contain same information, the primary card is used by the main employer, while the secondary card is used if the tax payer is engaged in an extra job.