Calculation of income for self-employed

Income from activity as self-employed can be included on the final close of the financial year for tax purposes. The financial year closes on the date stated in your tax notice of assessment, typically on 1 July of the subsequent year.

You can include your share of the company’s taxable profit, plus A-income paid by the company. For businesses operated in corporate form, it is, however, a requirement that you have significant influence or control. Significant influence or control is where you − or you together with your spouse or close family − own at least 50% of the company.

If your business has been operated by you as a single owner, you can include taxable profit before interest and other non-operating income and expenses in the calculation of your income as self-employed. This is the income that appears from box 111 in your tax notice of assessment issued by the Danish Customs and Tax Administration (SKAT)

Practical matters

The income you can include in the calculation of your income as self-employed for the previous tax year(s) must then be divided by 12 and be allocated to the months of the year. If you have had a tax profit of DKK 240,000, it means that an amount of DKK 20,000 can count as income for benefits for each month of the relevant year.

If you cannot meet the income requirement for the 3-year period, it is possible to make an extended tax notice of assessment for self-employed going 5 years back. If it is necessary to do so, it means that you can only include profit from your activity as self-employed in the 5 years, whereas you can include all income (profit from your business, income from paid work, fees, etc.) when calculating your income over a 3-year period.