Denmark’s government is fast-tracking a new increased tax break for commuters so it will be in force when workers return from their summer break. Here’s how much money you stand to gain if you travel to work.
What has the government proposed?
The government is temporarily increasing the transportation deduction (transport deduction) for the 2026 tax year to compensate Danish commuters for the increase in fuel prices due to the closure of the Strait of Hormuz.
As this commuter rebate is available to all commuters making longer journeys to work and back, including those using electric vehicles, public transport, or even cycling, the government argued this was preferable to cutting taxes on petrol and diesel.
How much will the transport deduction increase?
The government has proposed offering an extra DKK 0.89 per km rebate for commuters who travel between 24km and 120km to work and back and an extra DKK 0.45 per km rebate for any part of the journey beyond 120km.
People living in outer municipalities (remote municipalities) and certain islands will receive an extra 0.98 kroner per km.
This comes on top of the current deduction of 2.28 kroner per km for between 24km and 120km, and 2.53 kroner per km for outer municipalities and some islands.
Currently the deduction for commuting journeys over 120km is DKK 1.14 per km.
When will the deduction start to apply and how do you claim it?
Tax Minister Jakob Engel-Schmidt said in a press release that the government was pushing the parliament to pass the increased tax rebate before the summer break so that commuters could see the benefit of the rebate in their paychecks as soon as they return from the summer holidays.
The government submitted the bill to parliament on June 16th and it is due to have its final reading on June 25th, and will come into force as soon as the new law is published in Denmark’s Law Gazetteor Official Gazette.
Henning Boye Hansen, a consultant at the international accountancy firm BDO, told DR that to benefit from the rebate commuters would have to log in to their page and change their advance tax details.
Who will get the most?
According to two figures published by the Ministry of Taxation and Growth this week, commuters coming from Slagelse in Zealand are likely to see the highest average tax deduction, with an average rebate of 3,900 kroner, followed by commuters from Guldborgsund on Lolland and Falsterbo, and those on the Odsherred peninsular.
The municipalities with the greatest number of commuters eligible for the rebate were Aarhus and Copenhagen with 67,000 and 55,400 respectively.
