Deduction of transport costs in Denmark
Befordringsfradrag, the deduction of transport costs from home to the workplace in Denmark, is granted to all Danish entrepreneurs who travel more than 24 km round trip each day. In order to correctly calculate the total daily tax deduction that can be included in your annual tax return, you need to add up the number of round-trip kilometers, then subtract 24 kilometers from this total and multiply the result by DKK 1.90, i.e. the tax deduction rate set for 2021.The result equates to the total daily tax deduction.In order to benefit from the tax deduction, you must exceed 24 round-trip kilometers per day, i.e. the distance from home to business must be more than 12 kilometers one way.
The relevant tax rates are as follows:
- 0 DKK for 0-24 km per day round trip; 1.98 DKK per km for 25-120 km per day round trip; 0.99 per km from 120 km per day round trip (for 2019).
- 0 DKK for 0-24 km per day round trip; 1.96 DKK per km for 25-120 km per day round trip; 0.98 per km from 120 km per day round trip (for 2020).
- 0 DKK for 0-24 km per day in both directions; DKK 1.90 per km for 25-120 km per day in both directions; 0.95 per km from 120 km per day in both directions (for 2021).
Entrepreneurs who commute twice a day from home to the business (e.g. in the morning to open and in the evening to close the premises) are entitled to a double tax deduction. A good way to document the number of kilometers driven (which may come in handy if you have to submit such data to the Danish tax authorities) is to download and use a dedicated app for this purpose on your phone.