Rules and regulations you should know - 2023
Rates on tax-free milage allowance and deduction for transport are changing
Starting January 2023, rates on above mentioned have been increased primarily due to rising petrol prices and the expectation that this will continue in 2023. The increase also considers other expenses related to owning and maintaining a car.
Milage allowance (kilometerpenge)
If an employee uses his/her private car for work purposes, the employer may choose to pay out a tax-free compensation (milage allowance).
Rates 2023
0- 20.000 km. per year: 3,73 DKK per km.
+ 20.000 km. per year: 2,19 DKK per km.
If the employee chooses bike, scooter, moped or the likes as means of transportation, the rate is 0,61 DKK per km.
Documentation and checking transport allowance
As an employer, it is your responsibility to ensure that all conditions are met when paying out a tax-free transport allowance. There is no specific form to be used, but it is recommended to use the same method for all matters related to transport allowance.
Below information should always be visible in the companys bookkeeping records, as well as a visible sign of approval (signature, stamp):
Date
Purpose of transport
Destination and possible stops on the way
Number of kilometers travelled
Calculation according to rates
Whether your employee used his/her private vehicle
Should the company pay out a higher rate, this will instead be a taxable amount (regardless if it is a fixed or variable amount).
Deduction for transport between work and home
Employees who travel more than 24 km each day (that is, more than 12 km each way) to and from work are entitled to a deduction for transport between home and work.
All means of transport are accepted, including cars, public transport, bikes and car-pooling. If using public transport or bicyckling, the deduction is based on the distance between home and work.
Rates 2023:
0-24 km.: No deduction
25-120 km.: 2,19 DKK per km.
Over 120 km.: 1,10 DKK per km.
Over 120 km. In peripheral municipalities: 2,19 DKK per km.
Travel expenses
As an employer, you may choose to pay out a tax-free allowance for food and accomodation if an employee documents such expences as part of work-related travelling.
In addition, the company can pay tax-free amount for petty aqqusitions – the amount equals 25% of the rate for food allowance.
Instead of covering expences as per documentation (bills etc.), the company may choose to pay out a fixed rate (non-taxable) for food and beverages (555 DKK) and 238 DKK for living accommodations.
As of January 2023, travel expenses can be covered with a maximum of 30.500 DKK.
Read more: Tax-free travel allowance
Food allowance
Should the employee receive free food or free meals, the food allowance rate (550 kr.) must be reduced by the value of the free food or the free meals.
Deduction rate is 15 % for breakfast, 30 % for lunch and 30 % for dinner.
All tax-free payouts requires the employee to travel for at least 24 hours and that he/she has an overnight stay.
Benefits in kind 2023 Christmas gift from employer – tax-free
(value must not exceed 900 DKK)
Gifts from employer*
(Taxable after a value of 1.300 DKK is exceeded)
*This includes the Christmas gift Work related benefits
Taxable after a value of 6.700 DKK is exceeded
Multimedia (company phone, computer and internet)
The yearly taxable value for 2023 is 3.100 DKK.
The monthly taxable value for 2023 is 258,33 DKK.
Top tax bracket for 2023
The top tax bracket is applied at 568.900,00 DKK after labor market contributions have been deducted from your income.
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