Progressive personal income tax to the State has decreased during the last 10 to 15 years. The tax basis in Denmark has been broadened and greater emphasis placed on labor market contributions. Personal income tax in Denmark is very high. Companies pay a somewhat lower tax than private people. The income from corporate tax makes only 8 % of the total revenue. Corporate tax in Denmark is slightly higher tan the EU average but over a number of years has fallen significantly (from 50 % to 28 %).
Taxation of wage income tax in Denmark
(Average personal income tax and social security contribution rates on gross labour income)
Tax | % AW |
66 % | 100 % | 133 % | 166 % |
Central income tax | 4,1% | 5,1% | 9,6% | 12,5% |
Sub-central income tax | 22,8% | 25,2% | 26,6% | 27,4% |
Total income tax | 26,8% | 30,4% | 36,1% | 39,9% |
Employee social and health insurance | 11,9% | 10,6% | 10,0% | 9,6% |
´All-in´ | 38,8% | 41,0% | 46,1% | 49,5% |
Employer social and health insurance | 0,9% | 0,6% | 0,4% | 0,3% |
Taxation total | 39,3% | 41,3% | 46,3% | 49,6% |
Bc. Petr Gola
