Personal Allowance
As a general rule, all taxpayers are entitled to a personal allowance. This also applies to persons subject to limited tax liability who receive pay, etc., for work carried out in the country, provided they are considered a frontier worker. In 2010 the personal allowance for one year is DKK 42,900.00 for taxpayers who have reached the age of 18 by the end of the year of taxation. If a married person cannot "use" the entire tax value of the personal allowance, the balance will be transferred to his or her spouse.
Work-related allowances
Employees have allowances in connection with certain types of expenditure related to their job. These include trade union fees, unemployment fund fees and expenditure in connection with transport between home and work. Other types of expenditure for which an allowance is granted include interest expenses, private pension contributions, etc.
The various types of allowances will be deducted in different ways when your tax is calculated.
Transport allowance
If there is a long way between your home and your work, you are eligible for a transport allowance. What can be deducted is not the actual mileage expenses but an allowance based on fixed rates. It is your responsibility to calculate the allowance and enter it on your income tax statement. The allowance is calculated on the basis of the distance to your work and the number of working days you have in a year. The means of transportation you use is thus irrelevant.
There is no relief for the first 24 kilometres (return trip, i.e., 2 x 12 kilometres) per day between home and work. In other words, if your total daily transport between home and work is 24 kilometres or less, you are not entitled to a transport allowance.
The relief is calculated as the number of working days multiplied by an allowance per kilometre for each working day with transport. In a year an employee will typically have about 220 working days. Days off, holidays and sick days do not count as working days.
Double household
You are entitled to a separation allowance if you are temporarily staying and working in Denmark while at the same time maintaining a home for your family in your native country. The allowance is granted for a period of 24 months starting on the day you move to Denmark. The only requirement is that you are married or have been cohabiting for at least 1year and that you intend to stay together with your spouse/cohabitant. The allowance is granted in relation to documented additional expenditure.
Pension Allowance
In general, contributions and premiums paid in connection with private pension schemes or schemes administered by the employer may be deducted from your personal income. The deductions are not capped. However with regard to payments for capital pensions, contributions and premiums may be deducted by an amount of DKK 46,000 per year (for 2010).
The deductibility of pension premiums is normally restricted to premiums paid under pension schemes with approved resident corporate entities or with Danish permanent establishments of non-resident corporate entities.
Read more
Taxation in Denmark: Tax rates and tax limits
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Inwema 2010 
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