In some moments 2020 is a year that many of us would like to delete completely. But that’s not possible – nor is it possible taxwise. On the contrary the corona crisis requests us to give extra attention to the fact that there could be issues to correct in the tax return 2020.
It can make a big difference in kroner, if you got caught in Denmark or abroad for a longer period than expected. Special, temporary corona tax rules have been introduced, which make it possible to put several tax rules out of force, e.g. entry into full tax liability, use of cross-border rules and apply of the tax exemption rule in § 33A of the Tax Assessment Act when working abroad.
Cross border rules
The electronic tax return can be viewed in your personal tax folder from March 15, 2021, and as always, there is a long list of items to check, especially if you have conditions that extend beyond national borders. If you have relocated to or from Denmark in 2020, you must keep your eyes open. In the year of arrival, you must prepare a list of all your financial assets that were not already subject to Danish taxation (the so-called entrance values). These values are often of great importance at the sale of the assets.
In the year of departure, you should especially check your tax residency status. If you are not registered correctly, it might lead to unpleasant surprises. You must also be aware of whether you are subject to so-called exit taxation, which means taxation of unrealized gains at departure.
Individuals with special circumstances must also be aware of their special circumstances that apply to them, as Skat’s registrations are not accurate:
- Persons who are majority shareholders and who have so-called controlled transactions with their company must fill in a special form (05.021). Failure to submit may result in a fine.
- Pilots, sailors, travel fitters and others with work obligations outside Denmark’s borders must pay special attention to their tax situation.
- Persons who own real estate abroad must always declare the property in Denmark for tax purposes.
- Persons who reside and work remote in Denmark for a foreign employer must be aware of the special registration rules that apply in these situations.
Consider having support with your tax return
For 15% of taxpayers Skat does not have sufficient data to form a tax assessment. In complex tax matters, it might actually take months before the tax assessment is ready, so it is important that you and your potential advisor keep an eye on this.
Whether you can handle the filing yourself or need advice, of course, depends on how complex tax matters you have. But very often there will be choices to make where it is not immediately transparent, which choice is most advantageous to you. If you have income from abroad, business income, including housing rental, or just many tax-relevant transactions, we are ready to assist you.
We familiarize ourselves with your situation, which in the case of non-Danish income often means that both Danish and foreign tax rules and agreements between the countries must be included.
It requires many years of experience, a broad tax knowledge and daily work with just such issues. We should be glad to help you!
If you need help preparing your tax return and checking your tax assessment, please contact Inwema at firstname.lastname@example.org or call us at 3169 3169.
- March 15, 2021: The tax folders open in Skat.dk’s TastSelv, and you can file your tax return for 2020
- From 9 April 2021: Payment of excess tax if the annual statement for 2020 is ready
- 1 July 2021: Deadline for submitting the tax return 2020 and deadline for settling underpayment of taxes without the expensive percentage surcharge