Basically, when you are subject to full tax liability in Denmark, all your income is taxable - cash as well as assets in kind, including income that comes from another country. The primary rule is that you have to pay taxes on all types of income, including earned income, pension, and interest income. You have one or more allowances which are amounts deducted from your income. This reduces the taxable income and therefore also the tax. The most important allowances are personal allowances, interest expenses allowances, transport allowances and pension allowances. All taxpayers are entitled to the personal allowance, but certain different requirements must be met with regard to the other allowances.
The taxable income is the employees income less allowances. In the following a few very common types of income and allowances will be described. For further information, please contact Inwema ApS.
Employment Income
Employment income is subject to income tax as personal income. Salary, unemployment benefits, etc., as well as fringe benefits and pension payments are different types of taxable income. Labour market contributions and special pension savings are payable on the salery but not on unemployment benefits and pensions. An employment deduction of 2.5 % applies to all employment income.
Fringe benefits are also considered to be taxable income. A fringe benefit is a benefit paid wholly or in part by your employer, available for the recipient's private use. Basically, you will be liable to taxation on the market value of the benefit. For some fringe benefits, there is a "triviality limit" of DKK 5,500 (in 2010). Further, for a number of fringe benefits, special rules apply in respect of the determination of their value. For instance, the taxable value of the private use of a company car is fixed at 25% of the value of the car, computed on a minimum value of DKK 160,000 and a maximum value of DKK 300,000, and 20% computed on the value exceeding DKK 300,000. Valuation rules also exist for the use of accommodation, summer dwellings and yachts.
Capital income
Capital income comprises interest income from bank accounts, bonds, mortgage deeds, etc. (Rent income also constitutes capital income if you own the property which you let.)
Capital income is subject to taxation, and is thus included in your taxable income. Interest expenses incurred in connection with loans in banks and mortgage credit institutes can be deducted in capital income. If your interest expense is higher than your interest income, you have a negative net capital income. Negative net capital income will be deducted in the specification of your taxable income. However, the tax value of the negative net capital income is reduced to the rate of the health contributions and municipal taxes, in average 33.5 % (2010).
Share income
Share income comprises capital gains from quoted and unquoted shares and dividends from shares. Share income i subject to taxation, and is taxed seperately. The current tax rates on share income can be seen in the article: Taxation in Denmark: Tax rates and tax limits
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Tax allowances
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Inwema 2010 
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