Section 11: The tax authorities - who, what, where?
11.1. The tax authorities - who, what, where?
11.2. Preliminary income assessment forms, income tax returns and annual tax statements
11.4. Organisation and division of work within the tax authorities
11.5. Where can I find more information?
11.1. The tax authorities - who, what, where?
The tax authorities can easily appear to be a large and complicated institution with many departments. However in practice, a person normally only deals with a small part of the tax authorities.
As a rule of thumb, citizens should contact the municipal service department (borgerservice) or a tax centre.
The municipal service department deals with simple and general enquiries while more complicated matters are dealt with by the tax centres.
If the municipal service department is contacted but the case needs to be dealt with by a tax centre, the municipal service department will help to contact the tax centre and ensure that the case is transferred properly.
Citizens can decide themselves which municipal service department or tax centre they want to contact. If a citizen lives in Næstved but works in Roskilde, he or she can contact the tax centre in Roskilde if this is easiest.
11.2. Preliminary income assessment forms, income tax returns and annual tax statements
SKAT sends out the preliminary income assessment forms, income tax returns and the annual tax statements.
The preliminary income assessment form
The preliminary income assessment form is sent out in November for the following calendar year. This form is the basis for calculating preliminary tax, tax at source, which has to be paid in a tax year. Regular wage earners receive a tax card with the preliminary income assessment form, which informs the employer of the amount that must be deducted in tax before the wage is paid.
For many wage earners, information on the preliminary income assessment form is transferred electronically directly to employers. This means that it is not necessary to give the tax card to an employer unless changes have been made to the preliminary income assessment form or unless the person changes employers at a later date.
If a person needs to make changes to the preliminary income assessment form, an amended form can be sent to the tax centre or the municipal service department. Alternatively changes can be made by telephone or on the internet.
There can be many reasons why it is necessary to make changes to a preliminary income assessment form. It may be that a person expects to earn either more or less than the amount stated on the preliminary income assessment form. It might also be that a person has bought or sold property that has caused changes in their mortgage interest payments.
If income, or allowances, changes greatly, it is a good idea to change the preliminary income assessment form. If this is not done, there is a risk that the tax paid in the course of the year does not correspond with the tax that is actually due.
If the wrong amount of provisional tax is paid, a person risks having to pay residual tax, if he or she has had a bigger income or fewer expenses that year than stated on the preliminary income assessment form. If a person has paid too much tax, the money is returned with a remuneration of 2%.
Income tax return
The income tax return is sent out in March-April in the year following the tax year. Most citizens receive the normal income tax return, which the tax authorities have completed in advance with figures received from employers, financial institutions etc. If there are corrections to be made or extra information to be added to the income tax return, the tax centre or the municipal service centre must be told about this either in writing, by telephone or via the internet in the same way as for changes to the preliminary income assessment form. Any changes must be made by 1st May at the latest.
Annual tax statement
Over 60 % of all taxpayers receive the annual tax statement with their income tax return. The rest receive it when their income tax return has been filed. Married couples will not receive their annual tax statements until both parties have filed their income tax returns.
The annual tax statement is a statement showing how much a person has already paid in provisional tax and how much tax actually needs to be paid based on the income tax return. The annual tax statement shows whether a person will receive a tax refund or needs to pay residual tax.
Any questions or changes to the preliminary income assessment form, the income tax return or the annual tax statement should always be addressed to the tax centre or the municipal service department.
If a person provides new information for his or her income tax return, it will affect the annual tax statement. If the annual tax statement was received at the same time as the income tax return, any new information will mean that the person receives a new annual tax statement.
It is possible to reopen a tax assessment for a tax year, for example, if a person has forgotten an allowance. However, this should take place within 3 years following the end of the tax year in question.
11.3. Appeals
If a person disagrees with the tax calculations made by SKAT, or if a person receives a refusal to reopen a case despite new information, it is possible to appeal in writing to the local tax appeals tribunal or to the National Tax Tribunal stating in detail the reasons for disagreeing with the tax assessment.
Citizens can choose to lodge their appeal with the local tax appeals tribunal with the option of later appealing to the National Tax Tribunal, or they can appeal directly to the National Tax Tribunal.
Local tax appeals tribunal
Members of the local tax appeals tribunal are selected for service. They are not employed by the tax authorities and normally have another job or profession.
Appeals to the local tax appeals tribunal must be sent no later than one month after the decision or annual tax statement has been received. If the local tax appeals tribunal does not uphold the appeal, the local tax appeals tribunal must draw up a statement of claim, which the appellant is asked to comment on.
The local tax appeals tribunal can change the assessment completely, regardless of the content of the appeal. This means that the local tax appeals tribunal can increase the income assessment in instances where the appellant demands that the assessment is reduced. By appealing, a person can risk ending up paying more in tax than first calculated.
National Tax Tribunal
It is possible to appeal directly to the National Tax Tribunal. It is also possible to direct appeals to the National Tax Tribunal if an appellant disagrees with the decision of the local tax appeals tribunal. The National Tax Tribunal is Denmark s highest administrative appeal body for questions of tax, VAT, duties, customs and property valuations. The National Tax Tribunal is not a court.
When the National Tax Tribunal has received an appeal on a decision, material of relevance to the case is obtained. When the case officer has prepared the case, it is forwarded to the members of the tribunal for written consideration.
When a decision has been reached, the National Tax Tribunal informs the appellant and his or her representative, if the appellant has one. During the process, the appellant or representatives of the appellant can meet the case officer to discuss the case in person.
A person can also request that his or her case is presented orally for the members of the tribunal at a court sitting. This normally only takes place in special cases. The National Tax Tribunal can refuse to grant a request for a sitting, if the tribunal considers this type of meeting to be obviously unnecessary.
All citizens have the right to present their own case. The case does not have to be led by, for example, an accountant or a lawyer. The system has been created to allow appeals to be conducted without professional assistance.
Expenses for expert advice are fully refunded in tax cases which the taxpayer either wins fully, or in which the taxpayer s claims are predominantly upheld by the tribunal. If the taxpayer loses the case, 50 % of his or her expenses are refunded.
Should a person wish to appeal against a decision to the National Tax Tribunal, the following conditions apply:
- The appeal must be in writing.
- The appeal must be reasoned.
- All points to be appealed must be included.
- A copy of the decision to be appealed against must be attached.
- A copy of the statement of claim, if one has been made, must be attached.
- Copies of all documents that support and substantiate the appeal must be attached.
- A cheque for DKK 800, or a copy of a bank transfer receipt for the same amount, must be attached.
Once these documents have been received, a receipt will be issued that the case has been received by the National Tax Tribunal. If it is necessary to obtain further information from the appellant, his or her representative or from other people or authorities, the National Tax Tribunal informs the appellant of this and gives the appellant the opportunity to discuss the new information.
The fee of DKK 800 is refunded if the appeal is fully or partially upheld. On average, case processing time by the National Tax Tribunal is just under 14 months.
The courts
The decisions of the National Tax Tribunal can be brought before the courts. These types of cases must are first brought before the district court where the plaintiff lives. Even if the National Tax Tribunal has not reached a decision on a case, it is always possible to bring a case to court 6 months after the case has been presented to the National Tax Tribunal. Cases must be brought to court no later than 3 months after the final administrative body has either reached a decision or has refused to deal with the appeal.
Refunding of costs
In appeals to the local tax appeals tribunal and the National Tax Tribunal, the appellant can have 50 % of his or her costs for expert advice, such as an accountant or a lawyer, reimbursed by the state. If the local tax appeals tribunal or the National Tax Tribunal fully or predominantly uphold the appeal, expenses are fully reimbursed.
Similarly, it is possible to receive a reimbursement of 50% or 100% for expenses if the case is brought before the courts.
Reimbursement is given on application to the regional tax authorities.
11.4. Organisation and division of work within the tax authorities
A typical citizen only comes in contact with a small part of the tax authorities - typically the municipal service department and SKAT.
The diagram below shows how the tax authorities are organised into four different functions: Legislation, administration, appeals and assessment.
Organisation of the tax authorities
Legislation
The Department in the Ministry of Taxation functions as a secretariat for the Minister of Taxation. The Department draws up legislation proposals for the minister on behalf of the government. It has no influence on specific individual cases and therefore has no authority regarding specific tax assessments.
Administration
The administrative function comes under SKAT and the municipal service centre. SKAT comprises one main centre, 30 tax centres, a Customer centre and a Payment centre. The various municipalities deal with citizens' tax queries alongside the municipality s general service functions for citizens. Each citizen can decide individually which tax centre or municipal service department to contact.
All citizens can obtain a legally binding response regarding the tax consequences of a transaction, for example in connection with sale of property or shares. A request for this service must be sent to SKAT with a fee of DKK 300.
Appeals
The appeal function covers the local tax appeals tribunal, the National Tax Tribunal and the courts. Citizens can choose to either appeal to the local tax appeals tribunal or directly to the National Tax Tribunal.
The National Tax Tribunal accepts appeals against decisions made by the local tax appeals tribunals, SKAT and the Assessment Committee. It is possible to appeal directly to the National Tax Tribunal.
Property assessment
The property assessment function comes under SKAT. Every other year, a property value and plot value is assessed for all properties and this forms the basis of property tax. In the years when a property assessment is not carried out, an annual adjustment takes place.
Assessment appeals
The appeal function covers the assessment board of appeals, the National Tax Tribunal and the courts. The first instance of appeal is the assessment board of appeals.
11.5. Where can I find more information?
Further information regarding tax administration, the tax system or current tax policies can be found on the Ministry of Taxation's website.
On the Ministry of Taxation's website, www.skm.dk, there are recent press releases, legislative material, publications, articles by the Minister of Tax, information on current issues and more.
On SKAT's website, www.SKAT.dk, it is possible to change the preliminary income assessment form and income tax return (TastSelv). This is also the place to find information about the specific boxes on the income tax return, and to calculate tax.
It is not possible to make changes to the preliminary income assessment form or the income tax return on the internet or by telephone throughout the year. To make changes at the time of year when these services are unavailable, it is necessary to contact a tax centre or the local municipal service department.
On the website of the National Tax Tribunal, www.lsr.dk, you can read more about how appeals are conducted at the National Tax Tribunal.