(Last update: 2.1.2021)
Relevant tax rates for this blog
|Year||Rate for 0-24 km roundtrip per day||Rate for 25-120 km roundtrip per day||Rate for 120+ km roundtrip per day|
|2019||0 DKK||1,98 DKK per km||0,99 DKK per km|
|2020||0 DKK||1,96 DKK per km||0,98 DKK per km|
|2021||0 DKK||1,90 DKK per km||0,95 DKK per km|
How to determine if you are eligible for a tax deduction?
To determine whether or not you can deduct your transportation from your home to your company in your personal taxable income (this type of deduction is called “befordringsfradrag” in danish), then you need to calculate the total amount of kilometers, that you drive every day from your home to your company.
If this roundtrip distance is 24 kilometers or less, then no tax deduction is given.
You must exceed 24 kilometers roundtrip per day, in order to get a tax deduction – in other words – the distance from your home to your company, must be more than 12 kilometers one-way.
If your roundtrip distance is more than 24 kilometers, then the tax deduction given is 1,90 DKK (2021) per kilometer for the 25th kilometer and up to 120 kilometers.
If you exceed 120 kilometers per day, then the tax deduction in 2021 drops to 0,95 DKK (2021) per kilometer, for each kilometer driven above the first 120 kilometers.
You can use an app
One way to document the amount of driven kilometers, is to download an app to your phone, so that you can show the tax office (in case of questions), how many days you actually made the trip from your home to your company.
You can also write it down on paper, but the apps can be much more convenient.
This app here is quite popular in Denmark:
What if you drive 2 times per day to the company?
If you drive 2 times per day from your home to the company, you may be eligible for a double tax deduction, but again the documentation must be in order.
This double tax deduction may be relevant to those, who f.ex. own a restaurant and drives in the morning to open the restaurant, and again in the evening to close it.
Example on how to calculate the tax deduction
A person drives 40 kilometers from his home to his company and home.
It gives a total of 80 kilometers round-trip per day.
For the first 24 kilometers no tax deduction is given.
So from the 80 kilomters we remove the 24 kilometers (which are not tax deductable) = 80 kilometers – 24 kilometers = 56 kilometers
He gets 1,90 DKK per kilometer (2021 rate) in tax deduction, so his total deduction per day is: 56 kilometers * 1,90 DKK = 106,40 DKK per day in tax deduction.
This amount is to be declared on the annual tax return.