Tax incentives for individuals in further education and training

PDF Version
Name of the instrument - Local language
Fradrag for udgifter til kurser, studier og faglitteratur
Name of the instrument - English translation
Tax incentives for individuals in further education and training
Scheme ID
345
Country
Denmark
Reporting year
2020
Type of instrument
Tax incentive for individuals
Sub-type of instrument
Treatment of work/profession related training costs
Type of entry
Single instrument
Short description

Employees can deduct the costs of training directly linked to their present job from the tax base of their personal income tax (state and regional level) in addition to the general allowance in place. Only training expenses (including e.g. required literature) that are directly linked to the current job (e.g. mandatory due to professional regulation) and exceed a set threshold (DKK 6 300, approx. EUR 843) are eligible. Personal income tax consists of various components and elements of regressive tariffs, however, marginal tax rates are typically high (exceeding 50%). Moreover, employees need not pay personal income tax for further education paid by their employers, whose value is not considered as a form of fringe benefit.

Level of operation
National
Name of a part of the country
Not applicable
Name of the region (for regional instruments)
Not applicable
Name of the sector (for sectoral instruments)
Not applicable
Relevance
Further instrument
"announcement on the law on income tax ordinance to states" (Bekendtgųrelse af lov om påligningen af indkomstskat til staten, "Ligningsloven §31") https://www.retsinformation.dk/eli/lta/2019/806#P9
Objective(s) and target(s)
Training costs linked to a current job are considered as not avoidable job related expenses reducing the achieved personal income. In this regard, they are differentiated from any other educational expenses which only prepares for future employment in a general sense and are therefore not considered as nessessary expenses linked to the current activity.
Operation/management
Tax dedcution as part of the personal income declaration recuding the final tax due
Eligible group(s)
All employed
Group(s) with preferential treatment
No preferential treatment
Education and training eligible
Only training expenses (inlcuding e.g. required literature) direcly linked to the current job (e.g. manadatory due to professional regaulation) and exceeding a set treshold.
Source of financing and collection mechanism
Lost tax revenuee by the state/the municipalities
Financing formula and allocation mechanisms
Cost borne by the individual reduce the tax base for the individual income taxes. In case, an employer pays an employee's expenses for basic, continuing and further education, this not considered as a fringe benefit and therefore it is tax-free for the employee. The tax exemption presupposes that the education or course, has a business purpose for the employee, and thus that the course does not exclusively have a purely private purpose for the employee.
Eligible costs
Courses and study material (e.g. books) directly linked to the current job
Volumes of funding
Not available
Beneficiaries/take up
Not available
Organisation responsible for monitoring/evaluation
Tax authorities (State and regional level)
Most relevant webpage - in English
Not available
Most relevant webpage - local language
https://skat.dk/skat.aspx?oid=1920475
Recent changes

No recent amendment

Recent changes in response to COVID-19

No changes

Sources
https://skat.dk/skat.aspx?oid=2061771
https://www.retsinformation.dk/eli/lta/2019/806#P31
https://skat.dk/skat.aspx?oid=1920475
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