What is mileage tax deduction?
Mileage tax deduction, or mileage tax relief, is a deduction you are entitled to claim if your transport distance to and from work exceeds 24 km. To put it another way, if your workplace is more than 12 km away from your private address you are entitled to the deduction.
Automatic registration of your mileage via your phone saves you both time and money.
Keep in mind, that you cannot receive both mileage allowance (LINK) and mileage tax deduction. The tax deduction is in contrast to the mileage allowance not paid out but is calculated in the tax assessment notice. The value of the deduction is 26% – if your mileage tax deduction is DKK 1.000, then your tax saving is DKK 260.
When are you entitled to the deduction?
You are only entitled to mileage tax deduction when you transport yourselves to and from work. You are therefore not entitled if you work from home, attend a course, are sick, on leave etc.
You are only entitled to mileage tax deduction when you transport yourselves to and from work. You are therefore not entitled if you work from home, attend a course, are sick, on leave etc.
It is subordinate which type of transportation you use to get to and from work. You can take the bus, car, train or bicycle. However, it is absolutely essential that you get paid for working. This includes also student jobs, paid internships and wage subsidies.
You cannot get the mileage tax deduction, if:
- Your work is not paid
- Your transport is to and from education. State education grant (SU) does not count as paid work
- Your employer pays your transportation (e.g. if your employer pays your commuter pass)
- You have a company car available
Rates for mileage tax deduction
These are the rates for mileage tax deduction in both 2021 and 2022:
- Transport between 0 – 24 km: No deduction
- Transport between 25 – 120 km: The deduction is DKK 1.90 per km. per day in 2021. In 2022, the amount is DKK 1.98.
- Transport above 120 km: The deduction is the same in outer municipalities as transport between 25 – 120 km. In the remaining municipalities, the amount is DKK 0.95 per km. per day in 2021 and DKK 0.99 in 2022.
How to claim the mileage tax deduction?
If you have more than 24 km. to and from work you must report it to The Danish Customs and Tax Administration (SKAT) either in your preliminary income assessment or the tax assessment notice. Here you must enter your official private address and your work address.
Your mileage tax deduction will probably be calculated automatically in SKAT’s systems if you don’t change anything from year to year. But remember to correct your calculation if one or more of your conditions change. This may be the case if you move, change workplace or work more from home than usual due to, for example, COVID-19.
Want to know more?
Read more about deduction for transport between home and work on SKAT’s website.
