Spouses are taxed separately. Account is however taken of a spouse's net capital income when assessing tax. Also the basic allowance can be transfererd among spouses. Children are liable to tax independently.
Individuals are taxable on their income in Denmark from employment, pensions or grants, etc., according to the same rules as residents, apart from a certain standardisation of the rules on personal allowance and certain restrictions as to the allowance on assessment, depending on whether those concerned have been living in the country for more or less than six months.
The value for tax purposes of any shortfall in taxable income is set off against the taxpayer's top tax and dividend tax. If the taxpayer is married and the spouses are cohabiting at the end of the year, any remaining shortfall is deducted from the spouse's taxable income, and thereafter the tax value of any shortfall remaining is deducted from the spouse's taxes. Anything still remaining can be carried forward for the following years.
Negative personal income can be set off only against the income which forms the basis of assessment for the top tax, i.e. positive net investment income and personal income. In the year of the shortfall, negative personal income is deducted from the taxpayer's positive net investment income. If the taxpayer is married and cohabiting with his spouse at the end of the year, the shortfall is deducted in the first place from the spouse's personal income, and in the second place anything remaining is deducted from the total positive net investment income of the two spouses. Any remaining shortfall in personal income is carried forward for the following years.
A negative net investment income is not carried forward independently, but is deducted in calculating taxable income.
Beneficiary of Municipal income tax:
The income tax of a person fully liable to municipal income tax is normally payable to his/her tax municipality, i.e. the municipality in which the person in question is resident or - if he has no place of residence - to the municipality in which he was staying on 5 September before the calendar year in question. The same rule applies for married women. However, another municipality can be fully or partly entitled to tax, since a stay of at least three months in a municipality gives that municipality a right to part of the municipal income tax to which the taxpayer is liable, calculated in proportion to the length of the stay.
Persons who are only partly liable to tax usually pay income tax to the municipality in which they receive their income.
Extra employment allowance for single providers:
The extra employment allowance for single providers from 2014 was introduced with the Tax Reform 2012. In 2015 the extra allowance is 5.4 pct., but with a maximum of DKK 17,900. Going to 2022 the extra allowance will be raised to 6.25 pct. with a max of DKK 20,400.
Reduced child benefit allowance for families with high incomes:
With the Tax Reform 2012 a gradual reduction of the child benefit allowance for families with high incomes was introduced with a full effect from 2014. The allowance is reduced with 2 pct. of the yearly income, that is above a limit of DKK 723,100. The allowance is reduced if either one or both parents have a yearly income above DKK 723,100.