Income tax on rent, worked example, in Denmark

Taxation Researcher | September 28, 2021

Non-resident couple´s joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income2 18,000 72,000 144,000
Less Allowance 3 941 941 941
Less Expenses (40%)4 6,824 28,424 57,224
= Taxable Income 10,235 42,635 85,835
Income Tax 5
Up to DKK 56,200 0% - - -
DKK56,500 - DKK 544,800 8% 215 2,807 5,254
Over DKK 544,800 15% - - 1,891
Annual Income Tax Due 215 2,807 7,145
Tax Due as % of Gross Income 1.19% 3.90% 4.96%

Notes


1 The property is jointly owned by husband and wife.

2Exchange rate used: 1.00 EUR = 7.44 DKK

3 Taxpayers are entitled to an allowance of DKK7,000 (€937).

4 After deducting the allowance from gross income, taxpayers may deduct 40% to account for income-generating expenses.

5 Rental incoem earned by nonresident individuals are taxed at progressive rates.

INCOMTE TAX 2021

TAXABLE INCOME, DKK (€) TAX RATE
Up to DKK 56,500 (€ 7,594 ) 0%
DKK56,500 - DKK 544,800 (€ 73,226 ) 8%
Over DKK 544,800 (€ 73,226 ) 15%
 

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