Danish workers abroad can expect lower taxes after EU pressure

The EU argued that reducing the tax deduction for Danes working part of the year abroad violated rights of free movement

Danes who work part of the year in nearby EU countries will now be given their full tax deduction following pressure from the EU, reports Ugebrevet A4.

Until now, Danes who worked part of the year abroad had their annual tax deduction reduced for the time they spent working in Nordic countries, Germany or the Netherlands.

The European Commission argued that the tax policy violated EU residents' right to free movement, and after pressure the tax minister, Holger K. Nielsen (SF), has now decided to end the discriminatory policy.

READ MORE: Denmark unfairly taxes citizens who work abroad

Tax windfall for thousands
Ugebrevet A4 reports that it is up to the individual to seek his or her full tax deduction but that they should be able to be reimbursed for lost earnings back to the 2010 tax year. Some workers could claim up to 7,600 kroner per year.

Thousands of workers could be affected, as over 16,000 Danes worked in Norway in 2012 alone.

Despite the windfall, some political parties are disappointed that Denmark has changed its tax rules because of EU pressure.

READ MORE: EU welfare rulings challenge benefits of open borders

Political disagreement
“It’s wrong that the government succumbs every time the EU exerts some pressure,” Enhedslisten’s EU spokesperson, Nikolaj Villumsen, told Ugebrevet A4, adding that the EU has no jurisidiction to dictate tax policies in member states.

Enhedslisten is supported in this thinking by the right-wing Dansk Folkeparti, but lead opposition party Venstre argues that the government has made the right decision.

“It’s important that we support letting people earn money in different countries because it benefits both the individual and society as a whole,” Venstre's EU spokesperson, Eva Kjer Hansen, said.