Preliminary Income Assessment and tax cards for 2025

Ensuring that your tax card and preliminary income assessment are aligned correctly with actual circumstances is essential, especially for:

• Companies with cross-border activities
• Employees with international obligations
• Staff on specialised terms such as net salaries or stock-based pay

This accurate setup is vital to avoid unexpected tax arrears and ensure compliance with Danish tax regulations.

Why is the Preliminary Income Assessment So Essential?

The preliminary income assessment serves as a forward-looking calculation based on expected income and deductions.

When accurately updated, this assessment can help both companies and employees avoid unpleasant surprises in the form of tax arrears or overpayment at the end of the year.

Missing or incorrect details in the preliminary assessment can create complications, especially for:

• Employees with Foreign Tax Liability: Employees working in multiple countries or residing outside Denmark are often subject to different tax regulations. If the preliminary assessment does not account for this, it may result in significant tax arrears.
• Employees with Foreign Social Security Coverage: Foreign social security can change Danish tax conditions. Therefore, it is crucial that the preliminary assessment accurately reflects this coverage to avoid errors in tax payments.
• Employees on Net Salary Arrangements: Staff receiving net salary have a more complex payroll setup, where precise tax calculation is essential to ensure the correct amount is paid to the Danish Tax Agency.
  
  
• Employees with Stock-Based Pay (such as RSUs): RSUs and other stock-based compensation have specific tax implications. If these are not reported correctly, it could lead to substantial differences between expected and actual tax payments.

The Risks of an Outdated Preliminary Income Assessment

Without an accurate preliminary income assessment, employees risk ending up with tax arrears at year-end.

Tax arrears can be a financial burden for many, as the amounts owed can often be significant, particularly for those with complex pay structures and international tax obligations.

Employers may also feel the impact if their employees experience sudden tax arrears, leading to dissatisfaction and disappointment over payroll arrangements and the handling of tax obligations.

Crossbord’s Approach: The Crossbord Solution

At Crossbord, we recognise the complexity of international tax conditions.

Our specialised solution, The Crossbord Solution, is designed to address the challenges faced by Danish companies with overseas projects and international employees.

A crucial part of this solution includes ongoing review of tax cards and tax payments to ensure that everything is correctly set up throughout the year.

With The Crossbord Solution, companies can rely on our team to continuously monitor tax reporting and payroll setup so they:

• Minimise the risk of errors
• Help prevent unexpected tax arrears
• Ensure that all tax matters are handled in accordance with applicable rules

The Annual Process: Updating the Preliminary Income Assessment for 2025

With the new tax cards and preliminary income assessments released, now is the time for companies to begin their review and update of their employees’ tax information.

To facilitate this process, we encourage employers to:

1. Re-evaluate Employees’ Tax Conditions: Are there employees with changed international obligations, social security arrangements, or updated pay terms?
2. Integrate Updated Tax Information into Payroll Setups: Tax conditions for foreign employees, employees on net salary, and employees with RSUs must be handled carefully to ensure accurate collection and payment of taxes.
3. Utilise Crossbord’s Expertise: Crossbord can assist with ongoing reviews, ensuring that all employees’ tax cards and preliminary income assessments are up-to-date and accurate. This effectively reduces the risk of tax arrears and ensures compliance with Danish tax regulations.

In Summary: Ensuring Accurate Tax Setup in 2025

For companies with international dimensions and employees on complex terms, an accurate and updated preliminary income assessment for 2025 is essential for proper tax payment.

By ensuring that tax cards and preliminary assessments are correctly set up and reviewed throughout the year, companies can minimise the risk of tax arrears and maintain employee satisfaction.

The Crossbord Solution offers tailored and continuous support to ensure that all tax and social security conditions for cross-border employees are handled correctly.

This helps companies avoid issues while allowing employees to trust that their tax matters are in the best possible hands.

Learn more about the Danish tax cycle here

Ensure Accurate Preliminary Income Assessment and Tax Cards

Don’t wait until it’s too late. Ensure your company’s tax setup is accurate and compliant for 2025.

Contact Crossbord today to learn how our expert team can help you navigate the complexities of international tax conditions and secure peace of mind for the upcoming tax year.