Deduction for interest expenses

When you share a loan with your spouse or cohabiting partner, 50% of the total interest expense is automatically reported to the tax assessment notice of each of you.

Joint loans with your spouse

If you and your partner are married and jointly taxed and want another distribution of the interest, you can transfer interest expenses to each other in your tax assessment notices. In you preliminary income assessments you can enter your individual deduction for interest expenses. Log on to E-tax (TastSelv) to add the information.

Joint loans when you are not married

If you have a joint loan with someone that you are not married to, such as your cohabiting partner, you must contact us to change the distribution of interest. To do so, follow these steps:

1. Log on to E-tax (TastSelv)
2. Select Contact
3. Select Write to us
4. Select 'Indkomst og fradrag' (Income and deductions)
5. Select 'Årsopgørelsen' (Tax assessment notice)
6. Select 'Spørgsmål og ændringer til årsopgørelsen' (Questions and changes to tax assessment notice)
7. Select 'Fradrag' (Deductions)
8. Select 'Rentefradrag' (Deduction for interest expenses)
9. Select 'Anmodning om flytning af renter (Borger(/(erhverv/Selvstændig)' (Request to transfer interest (Individuals)/(Business/sole proprietorship).
10. Enter the information requested. Remember to attach documentation in the form of a signed agreement (by all parties), stating how any debt (liability) is now distributed. We cannot process your request without documentation.
11. Click Send

You may also send us a letter specifying the corrections to be made and why you want to make such corrections. Remember to enclose documentation.

Send your letter to:
Skattestyrelsen
Nykobingvej 76
Bygning 45
4990 Sakskøbing
Denmark

If you separate

If you want to change the distribution of interest because you have separated and no longer have to share the interest deduction, use the same procedure as above.

If you separate and continue to own a joint property, you should be aware of the property value tax.

Property value tax when you separate (in Danish only)

The interest on your loans is automatically deducted. The deductions are transferred to your tax assessment notice (årsopgørelse). But if you want to benefit from the deductions throughout the year, you enter your current interest expenses in your preliminary income assessment (forskudsopgørelse).

If the interest on your loans or mortgage has changed, you can adjust it for the year to match the actual amount.

In field 483 in your preliminary income assessment, you enter your interest expenses to mortgage credit institutions and third-mortgage credit institutions (reallånefonde) and tax-deductible capital losses resulting from the refinancing of cash loans.

In field 481 in your preliminary income assessment, you enter interest expenses on your debt to:

• Banks
• Pension funds
• Insurance companies
• Charge card schemes
• The Danish Agency for Public Finance and Management (Økonomistyrelsen)
• Stockbrokers, brokers and bankiers
• Lawyers
• Municipals
• Interest expenses on mortgage deeds held in a custody account

Your tax rebate on negative capital income depends on your income, your municipality (tax) and if you're a member of the Evangelical Lutheran Chruch in Denmark.

The tax rebate for negative net capital income (interest deduction) of up to DKK 50,000 for singles and up to DKK 100,000 for married couples is approx. 33.1%.

Example:
If your intererest deduction is DKK 40,000, your tax rebate is DKK 13,240.

Enter claims for interest expenses in box 44 in your tax assessment notice:

• Deductible interest on private debt that it not stated in your tax assessment notice
• Interest from the completion statement when you buy or sell real property
• Interest on loans with more than two owners
• Interest on joint loans taken out via the homeowners' association on which you are making repayments and paying interest in your monthly payments to the association

Enter the below interest expenses in your tax assessment notice under Non-Danish income in boxes 432 and 493:

• Interest on non-Danish debt
• Interest on loans taken out in Denmark but for purposes outside Denmark
  • Loans taken out with a Danish mortgage provider for non-Danish property are stated in your service letter under box 41.

• Interest expenses for taxes, labour market contributions, special pension savings and customs and excise duties. 
• If you have not paid your interest expenses for previous years, you will not be able to deduct the interest until you have paid the amount owing.
• Interest if you have undertaken a debt obligation as an anticipated inheritance or a gift for your children, grandchildren, adopted children, foster children and stepchildren and their children and spouses. 
• Interest on loans granted according to the Danish Act on Loans to Pay Property Taxes (Lov om lån til betaling af ejendomsskatter).
• Interest on a housing allowance loan granted according to the Danish Act on Housing Allowance for Pensioners (Lov om boligydelse til pensionister) or according to the Danish Act on Individual Housing Allowance (Lov om individuel boligstøtte).
• Interest covered by a tax-exempt grant (for example in connection with urban renewal loans).
• Interest which the cooperative housing association and not the individual cooperative member is liable to pay. This also applies even if the individual member pays interest over the rent.

Interest on debt to public authorities is not tax deductible as of the income year 2020.

Negative interest rates mean that you either pay money to keep your savings in the bank or that you will be paid money to borrow money.

• Deposits/savings: You get a tax deduction for negative interest rates paid for a deposit account. This amount will automatically be included in your tax assessment notice as a negative amount in box 31 'Renteindtægter af indestående i bank m.m.' (Interest income from bank deposits, etc.).
• Loans: If you have a loan with a bank or mortgage credit institution and you are paid negative interest, this amount will automatically be included in your tax assessment notice as a negative amount in box 41 'Renteudgifter af gæld til realkreditinstitutter m.m.' (Interest payments on debts to mortgage credit institutions, etc.) or box 42 'Renteudgifter af gæld til banker m.m.' (Interest payments on debts to banks, etc.). 

In the preliminary income assessment (forskudsopgørelsen), the corresponding fields are: 'Renteindtægter af indestående i bank m.m.' (Interest income from bank deposits, etc.) in field 233, 'Renteudgifter af gæld til realkreditinstitutter m.m.' (Interest payments on debts to mortgage credit institutions, etc.) in field 483, and 'Renteudgifter af gæld til banker m.m.' (Interest payments on debts to banks, etc.) in field 481.