The Craftman´s dedictible returns, Denmark

On January 30, 2025, a number of initiatives were adopted by Bill No. L 117 B, including the reintroduction of a green craftsman's deduction and an expansion of the already existing service deduction.

The purpose of introducing the green craftsman's deduction is, among other things, to motivate green renovation. In addition, the intention behind the expansion of the service deduction is to free up more time for Danish families.

What is covered?
All taxable persons who have reached the age of 18 at the end of the income year can receive a deduction for selected crafts and services in the home or holiday home. Deductions in the home also require permanent residence at the time the work is performed.

As for the holiday home, the right to deduct is limited to those who own and are liable to property tax on the holiday home at the time the work is performed. In addition, the owner's spouse is also included in the group of persons, if the spouses were married and cohabiting at the time the work was performed.

Services covered
The service deduction is expanded with additional services and increased to DKK 17, 500. The services include, among others, general cleaning, window cleaning, childcare and general gardening.

The craftsman's deduction runs up to DKK 8, 600 per person in 2025 and its value is approx. 26%. The craftsman's deduction provides a deduction for wages for green renovation, for example energy-saving improvements, climate protection, etc.

Conditions for the deduction
A condition for obtaining the deductions is that the work was performed from 1 January 2025 or later. The work must be performed by a company registered for VAT in Denmark or by a person who has reached the age of 18 before the end of the income year in question and is fully liable to tax in Denmark. It should also be noted that the deduction only applies if payment is made electronically.

Regarding deductions for services relating to holiday homes, it is also a condition that the holiday home has not been rented out in the income year, as deductions are already granted for this under current rules.

Entry into force of initiatives
The craftsman deduction and the extension of the service deduction will be implemented with effect from 1 January 2025. It is therefore not possible to obtain deductions for craftsman services performed before the entry into force date.

Tax Consulting, VAT