Experts explain who benefits from Denmark’s proposed tax deal

Most people earning between 35,000 and 45,000 kroner a month will not directly benefit from the proposed abolition of middle and top-top tax, tax experts told readers in a question-and-answer session reported by DR.

The government and the Danish People’s Party presented the agreement today. It would cut petrol and diesel prices by two kroner per litre next year, abolish middle tax and top-top tax over the next three years, and provide 11 billion kroner in tax cuts for people with the highest incomes and businesses.

The agreement is a political deal and has not yet been passed into law, the experts said. Its effects will depend on individual circumstances and on which proposals are ultimately enacted.

Who benefits from the tax changes?

People earning between 35,000 and 45,000 kroner a month generally do not currently pay middle, top or top-top tax, said Pernille Byg, a tax adviser at BDO. They would therefore not directly benefit from abolishing the taxes. Other changes concerning cars and the taxation of investments could affect them, depending on their finances.

Middle tax is based on income, not occupation. In 2026, it is charged at 7.5 per cent on personal income after labour market contributions above 641,200 kroner a year, equivalent to a gross monthly salary of about 58,000 kroner, Byg said.

People whose income comes only from benefits such as disability pension, social assistance, unemployment benefits or the state pension would not receive the same employment-related tax cuts as wage earners, Byg said. Other changes to taxes and duties could still benefit some people, depending on their overall finances.

What about pensioners and graduates?

The proposal contains no measure that directly affects pensioners, said Betina Grimstrup, a personal finance analyst at Nordea. However, pensioners with pension income above 58,000 kroner a month per person could benefit from the abolition of middle tax.

From 2028, newly qualified graduates would generally have to have worked at least four hours a week in 18 of the final 24 months of their studies to qualify for unemployment benefits. In return, membership of an unemployment insurance fund would become about 3,000 kroner cheaper during the first year after graduation. Special rules would apply to some groups, including students receiving disability supplements and people who have been ill or on parental leave.

Will the changes appear on the tax assessment?

The Danish Tax Agency delayed the opening of the 2027 preliminary tax assessment until 24 November so it could include some new deductions, Byg said. However, the measures in the proposed agreement must first be turned into legislation, so taxpayers should not expect every part of the deal to appear in the assessment.