Denmark: Opportunity under new approach for allocating employment income between Denmark and Sweden

Benefits for employers and employees

Between Denmark and Sweden

The Danish tax authority is allowing a new approach regarding the allocation of employment income for those employees who need to allocate income between Denmark and Sweden.

The new approach is in response to last year’s challenges for employees who had to allocate their employment income between Denmark and Sweden (for instance, for commuters in the Øresund region and for employees who worked from home in Sweden).  

Benefits for employers and employees

The new approach will simplify the tax return process for employers, employees, and the Danish tax authority. There will be one report that will include the allocation of employment income for each month, per employee for the income year 2021. This report will form the basis for the income allocation between Denmark and Sweden.

  • The employers’ reported salary in “E-indkomst” would not need to be revised by the employer with retroactive effect (to reflect the income allocation between Denmark and Sweden).
  • The employee would not need to inform the tax authority in Denmark of the allocation of employment income between Denmark and Sweden on the individual’s Danish tax return.

Read a February 2022 report [PDF 234 KB] prepared by the KPMG member firm in Denmark

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.