Sweden and Denmark are neighbouring countries but their tax systems are very different. During my time in Sweden I discovered that if you did not file your expected income for the coming tax-year with the IRS, they simply deducted 1/3 of your income. As it was, this more often than not was within a couple of 100 SEKs of the income taxes, I had to pay.
The Danish IRS is less generous. If you don’t file your expected income, they’ll deduct a whooping 60 % of your income. And the system isn’t just complicated; it’s very complicated. In Sweden, there’s just wage income and capital income. In Denmark, there are something like fifteen different categories of wage income. And then there are even more categories of capital income.
To make a long story short, I realised that I would probably have to spend a working day finding the nearest tax office, explaining my case (for starters: living in two countries during 2008 and having income from three different countries) and in all likelihood getting it wrong. So I decided to take the plunge, live on a subsistence budget until 2009 and take whatever I could get when I filed my 2008 tax report.
Easy, no? No. Because the Danish IRS in its wisdom decided that you could file some of your tax deductions in February before the first calculation of the 2008 taxes was made in March. So I filed my transport deduction (I was commuting between Odense og Copenhagen during the autumn semester) for starters. Now, the IRS informed me that I could expect a payback of 30.000+ DKK – not so surprising, but I still have to file some of my foreign income – which I couldn’t do in February – so the figure isn’t final.
Tell that to the IRS: They insist in entering the money on my bank account on Monday. Then I have to revise my declaration, and then I will have to pay back some of the money I received from the IRS.
Still, there should be something left for my Old Mother’s 70th birthday 🙂