New year, new taxes

A number of tax changes come into effect in 2012 – see how they will affect you

December 29th, 2011 1:12 pm| by admin
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The new year will usher in a myriad of new tax rules. But whether those rules will put pluses or minuses in your budget all depends on who you are. Check out our overview below of the coming changes to DenmarkÂ’s tax rules and see where youÂ’ll stand in 2012.

Tax breaks

The unpopular ‘multimedia tax’ – the 3,000 kr per year tax on work-related telephones and computers – has been eliminated. Work computers used at home will no longer be taxed, but employer-provided mobile phones will still be hit with a 2,500 kr tax.

The ‘household help’ tax deduction of up to 15,000 kr per year per adult per household has been extended through the end of 2012, lowering the cost of professional household improvements and maintenance by up to one-third.

Higher ‘green checks’: The state’s energy tax refund to all tax-paying adults and their children will increase slightly to compensate for increased fuel and water taxes (see below).

The 35,136 kr maximum child benefit per family is eliminated, allowing families with several young children to receive higher state child support checks.

Business deduction for research and development costs: companies recording losses in 2012 due to research and development investments will now be allowed to take a deduction of up to 1.25 million kr.

Tax hikes

Cigarettes, alcohol, chocolate, sweets: all of the ‘sins’ will cost a little more in 2012. A pack of cigarettes, for example, will cost three kr more. (Increases go into effect April 2012.)

Coffee and tea: higher excise taxes on imported coffee and tea as well as coffee and tea extracts mean that a caffeine-fix will likely also be costlier.

Also, tap water: price increasing from 5.23 to 5.90 kr per cubic meter – a 13 percent rate rise.

The maximum tax-exempt pension deposit will be lowered from 100,000 to 50,000 kr per year. Analysts expect that as a result Danes will shift some four billion kroner into other retirement savings accounts and up to five billion kroner into private savings, reports Jyllands-Posten.

Employee stock ownership schemes will no longer be tax exempt.

Stocks-for-salary payments will no longer be exempt from payroll taxes.

Employer-provided supplemental health insurance plans will no longer be tax deductible.

Taxes on business ownership transfers between family members will increase. Before 2012, as much as 75 percent of a family-owned companyÂ’s liquid assets were exempt from the transfer tax. Now, just 50 percent will be. Powerful business families, including the owners of retail giant Jysk, put the kibosh on the left-leaning governmentÂ’s initial plan to lower the exemption to 25 percent of assets, reports Jyllands-Posten.

Increased duties on nitrogen oxide (NOx), a harmful chemical additive used in fuels, which is released into the atmosphere during combustion. (Increase goes into effect July 2012)

Multinational corporations will have fewer tax loopholes and more oversight from the tax authority Skat.

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