Tax deductions on pensions

Aske Buemann

CEO & Co-founder

Tax deductions on pensions

When you retire, your pension payments will typically be taxed as personal income. However, there are certain deductions that you can still make use of. These include the craftsman's deduction (before March 31, 2022) and the service deduction. It is therefore a good idea to check which deductions you can still make use of when you retire.

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What do I have to do with my tax return when I retire?

As a pensioner, you will continue to pay taxes, but your income and tax situation will change.

It is therefore important to update your advance tax statement with the Danish Tax Agency so that you pay the right amount of tax each month. You can do this via skat.dk or by calling Skattestyrelsen.

If you do not update your withholding tax return yourself, you risk paying either too much or too little tax. If you are unsure about anything, you can contact the Danish Tax Agency for help and guidance. You can also choose to have an accountant review your tax affairs and ensure that you are paying the right amount of tax.

As the tax year draws to a close, many of us start thinking about our tax bills and whether we will end up paying a tax arrears. A tax arrears is the amount of tax you owe when your total taxable income exceeds the amount of tax you have already paid.

Fortunately, there are several things you can do to minimize the risk of tax arrears.

1. Check your advance payment details

First of all, it is important to check your withholding information for the year, as this is crucial to determine how much tax you should pay. If you have changes in your income or deductions, it is important to update your advance information so that you pay the right amount of tax during the year.

2. pay extra taxes

If you want to avoid tax arrears, you may want to consider paying extra tax during the year. This can be done by changing your withholding tax statement so that more tax is deducted each month. This way, you will avoid having to pay a large tax bill at the end of the year.


3. Keep track of your deductions

Deductions can help you reduce your overall taxable income, and therefore the risk of a tax arrears. Make sure you keep track of your deductions and include everything you are entitled to. This could be anything from trade union dues to interest on student loans.

4. Get professional help

If you are unsure of the best way to avoid tax arrears, you may want to get professional help. An accountant or tax advisor can help you review your withholding information and deductions to find the best solution for you.

If you are owed money on your annual statement, it will normally be paid in March or April of the following year. If you are owed money on your annual statement for 2022, it will be paid in April 2023.

It is possible to pay off a tax arrears. You can either pay the tax arrears in full or you can set up an installment plan with SKAT. If you choose to make an installment payment, you will have to pay a certain amount of the tax arrears each month until they are paid in full.

See if you can get a tax refund in just 15 minutes.

In TaxHelper, we help you find the deductions you're entitled to. You answer a few simple questions that take just 15 minutes to complete.

Then we report the deductions, and you get an extra DKK 2,704 back in tax. At the same time, you only pay if you get a tax saving.

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