If you planning to move to Denmark or have already completed the process of immigration and shortly you are flying to settle down in the country, you are instructed to know a few things about the country’s labor market and the tax system that exists there. Like many countries, the tax system of Denmark has numerous rules and laws.

To start off, SKAT is the authority in Denmark responsible for collecting taxes. All citizens earning from their employment in the country are entitled to pay tax. However, the amount of tax payable is determined taking the income and allowances a person gets into consideration. Normally, an individual is required to pay eight percent in labor market contributions of all of his income. This eight percent is subtracted before other tax is calculated. The employer subtracts the tax and the labor market contributions from an employee’s income. The income tax return is then received by en employee by the end of the year, followed by the annual tax statement issued by SKAT. In short, in Denmark, individuals entitled to pay tax, have to pay labor market contributions and provisional tax each time when they receive their salary.

Below are the people entitled to pay Danish income tax, who;

Run businesses
Unemployed, but receive money from the state/unemployment funds
Students who receive educational grants
Senior citizens who receive national pension
People living in Denmark, but work abroad and receive an income from broad

As we have already mentioned, the tax rates for all individuals are not equal in Denmark. Higher the income, higher the amount of tax an individual is entitled to pay. To know more about Denmark and any immigration related issues, contact an Immigration and Visa Consultant!