What foreigners in Denmark should know about annual tax statements

If you reside and pay tax in Denmark and also have financial activities abroad, there are several things to keep in mind when checking the annual Danish tax statement, which was released on Monday.

Taxpayers in Denmark – whether Danish or foreign nationals – should be aware that, if they have financial activities abroad, these will affect their annual tax statements.

The annual statement, årsopgørelsen, was released in Denmark on Monday. Taxpayers can view their tax payments, income and the deductions for which they are eligible on the statements, and have until May 1st to update any missing or incorrect information.

In many cases, the annual statement – which applies to the preceding calendar year – results in the taxpayer receiving money back if they have paid an excessive amount, termed overskydende, skat, to the Tax Authority.

Senior consultant with accountancy firm BDO in Denmark, Henning Boye Hansen, told the Ritzau news wire that it is common for people with financial interests abroad to have problems with their annual return.

You are fully liable for taxation in Denmark if you live or stay in Denmark for more than six months. This means that your income, loans, or property abroad, must be reported on the annual tax statement, årsopgørelsen. This still applies if you have also paid tax abroad.

Issues can come from circumstances including working abroad, having a foreign bank account, owning a holiday home abroad or owning investments in a foreign platform.

Danish tax authorities do not automatically receive information on these types of financial interests, unlike in Denmark where, for example, a salary, home ownership, interest payments and pension contributions (within Denmark) are automatically registered with the tax authorities.

“Young people feel particularly less bound by national borders and are comfortable online. They can choose foreign investment platforms that grab their interest such as shares, bitcoin or something else,” Hansen told Ritzau.

“But these platforms don’t inform the Danish Tax Authority. That means you must do this as an investor by July 1st and within the year of investment. There can be major consequences if you forget to do it,” he said.

Foreign investments registered with the Tax Authority are only eligible for tax deductions on potential losses if they are registered by the July 1st deadline, he noted.

“There are various horror stories about people who have had to pay tax on money they didn’t earn because they did not register their investment at the right time,” he said.

If you worked abroad in 2024, this should also be registered on the årsopgærelse.

“That also applies even if you have paid tax in the country in which you worked. When you reside in Denmark, foreign salary must go on the Danish tax statement,” Hansen said.

In general, you must pay tax in Denmark on earnings you made abroad if you are a resident of Denmark.

If you own property abroad, you are eligible for Danish property tax under the same rules as Denmark. The property’s value for tax purposes is assessed each year.

“Some foreign property taxes are deductible in Denmark, however,” Hansen noted.

“We see people who pay both too much and too little Danish property tax because it is so technically difficult to calculate,” he said.

What foreigners in Denmark should know about annual tax statements

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