Last Week in Denmark

Billion kroner boost for SMEs, Check Preliminary Tax, Tougher Rules for Airbnb Rentals in Denmark LWID S4E15

• Season 4 • Episode 15

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Billions, tax traps and stricter rentals . This week Katie and Kalpita dig into fresh SME funding, tax checks and Denmark’s new clampdown on short term rentals. 

This week's episode explores how a new billion kroner fund aims to lift small and medium-sized businesses through digital and green upgrades, questions remain about who will actually benefit. SKAT has opened preliminary tax checks for 2026, a simple step that can save you from a nasty bill next spring. And the government is tightening rules on short-term rentals to curb shadow hotels and free up much-needed housing, giving municipalities sharper tools to enforce the 70 to 100-day limit. 

Topics:

(02:17) Billion kroner boost for SMEs

(11:19) Check Preliminary Tax

(16:31) Tougher Rules for Home Rentals in Denmark

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Katie: 

Hello. Hello. Welcome to episode 15 of the Last Week in Denmark podcast. This is Katie and this week I am with the wonderful Kalpita. How are you, Kalpita?


Kalpita:

Hi, Am. I'm very, very good. Very glad that the winter has finally hit. Yay. It's time for Hygge cozy times. It's okay to be at home and not do anything. So I'm very, very looking forward to minus degrees and snow and wind and just. Yeah. Sitting by the fireplace or the radiator.


Katie: 

Oh, there's maybe snow this weekend in Aarhus. Are you planning to get snow in Copenhagen?


Kalpita:

I am. I don't know if the weather is, but.


Katie: 

I am personally always staring out for snow.


Kalpita:

Yes, I have signed up for it already.


Katie: 

I had my first luck in ables cure yesterday. It was very good.


Kalpita:

You know, I have made actually I had to call my mother in law because she's so nice and she's so good at making food. I had to call her and demand that this season's a plus cure is something she and I are going to do and I just need to eat them. When we are in the summer house together going for yule focus and one of the evenings we are having a blisskever and that's an appointment.


Katie: 

That's the appointment that everybody should have at the beginning of winter. 100%. They are too easy to eat though, because it's like oh, cute little Garp.

Kalpita:

Garp. Garp.


Katie: 

It's dangerous. But anyway, when people have listened to this podcast. Thank you all so much for voting in the elections that have just happened. I'm sure everybody who was eligible to vote did vote because we talked about it for like four weeks. But now we have three new topics. Nothing to do with voting for this week. The first topic is very exciting. A new 1 billion kroner fund for small and medium enterprises to support businesses on the way for digitalization, green transition and innovation. Secondly, time to check your preliminary tax. Scat has opened the annual update so people are encouraged to review their income to make sure there's no scary surprises at the beginning of next year year. And tougher rules for home rentals. Governments are planning stricter limits on short term rentals and new powers for authorities to stop shadow hotels, which I'm really enjoying the imagery of that. So yeah, we'll start off with the big, big good news which is the new billion kroner fund for small and medium enterprises. So this is the way for the government to invest in small and medium sized companies to boost productivity, digitalization and green transition. So this is kind of the government saying it's a difficult global economy right now. How do we make sure that the backbone of the Danish economy, which is the 99% of businesses that are small or medium enterprises, are getting the support they need to stay competitive in this market? A billion kroner is a huge amount of money.


Kalpita:

Yeah. When, when you look at it as, as a number, 1 billion looks or, or sounds like a very, very, very big number. But when you put that in context with how many businesses we have and need help, that may not be as big a number as it seems. Also you and I could start a business, but then we're women and let's not forget the gap between businesses run by women and the support they get. Unless you are a digital business or whatever other criteria is there. Which also makes me think that women's health and anything related to women's health has not been included in this. This also sounds like a support for future economic growth, especially with green transition and digitalization. We are heavily into these industries also now that all the data and information coming out from COP30 in relation to how pollutant Denmark has been given its history. But we have also been a, that has evolved, become more digital and we've controlled a lot compared to the past of our footprint compared to other countries in Danish context, third world countries which are more pollutant and are contributing towards climate change a lot more than Denmark is in the present situation. So I, I see that this help and this boost is going towards making the economy stronger, which is great. We have through, through the whole year in the. Has spoken about how industry is growing in Denmark, especially in this year. And given that we have these trade wars and these hybrid wars going on. So this is a, this looks like an effort to strengthen those factors about Denmark and its economy. What do you think?


Katie: 

I see similar to you in the sense that it's like, oh, it's a very big number, amazing. But it's, it's quite vague. And then when you break it down to what money is going where it's a little like, ooh, how many businesses can apply for this? And what does that actually work out as? Money in the account of a small or medium enterprise? Because running a business is expensive. I've never run a business myself, but I have worked in a new startup being their kind of second employee. And it is so easy to spend money, especially when you're trying to kind of keep up with competitors or you're seeing like all this AI nonsense and you're like, oh, I want this and I want this. This will make my life so much easier. But then you confus a tool and a process and then you don't really know what really to do with these things. So when you break down where the funding is going to go, they've. They've given them these cute little names. So business program that's going to be 312.5 million with the aim of strengthening the development of Danish SMEs. So already there it's kind of like, that's extremely vague. So when you have 99% of the Danish economy applying for 312.5 million kroner, who's actually getting what and how much do they actually get from that something called Business lighthouses, which is 258.5 million. That's the aim of promoting the development of new solutions to major societal challenges and developing national positions of strength. But again, that could mean anything. That could mean cybersecurity innovation, or it could mean making it easier for people to find out where the pant cams are. So it's easier for people to pay for food when they don't have money to do it. So that's again very, very vague. The green transition in circular economies. That's 272 with the aim of improving companies conditions for working with sustainability and circular economy. Weird. Two things to kind of put together there. So again, huge umbrella. So who's going to get what and then also who's in charge of approving this money and where it goes? Because as you say, there's going to be inherent bias depending on where that funding comes from and who's what the process is, who approves it and then who's monitoring how it's actually being used? Because I know I definitely worked in companies where we've applied for something to do with sustainability and did we necessarily invested in sustainability a little, not a lot. There's also an entrepreneurship program. So the aim of strengthening entrepreneurs and increased turnover, creating employment effect and investment in major entrepreneurial events, expansion of acceleration efforts for unmanned systems. So that seems to be AI, drones and AI. People are loving drones and AI at the moment. And then digital tools for SMEs which could be literally anything. So that could be the coffee machine. Coffee machines are digital now. They run on WI fi and Bluetooth.


Kalpita:

Yeah, there was a report I watched on TV about how sad situation. But now people who are not able to or the. Some vulnerable individuals in society are now sorting to use robot vacuum cleaners because they just absolutely cannot manage their day to day and that's what they have to succumb to and it's, it's a hassle because they get stuck and, and you can't really charge them or get them to work. I'm saying that because like you said, AI and automation and digitalization is very, very big. But it also needs to be from like coffee machines are digital, but how is that really benefiting our life? You know, AI is great for some aspects and some aspects it's not really doing my dishes, is it? It's not cooking food for me and it's not taking over my practical life. So great to have AI and you know, be efficient and all of that. But then again the allocation and, and the, and the end result that we are trying to chase is also more relevant in this conversation, especially when you're starting to giving out tax money to things like this. I do believe that this will in some aspects give a boost to businesses. I know one of the most popular tech events have received funding this week and quite significant funding. So they are growing bigger and bigger as well. So I'm assuming it's coming from this little pot of support. I also wonder if this is only something that comes from the awareshoosl or the business support arm of the state, or is it also going to be distributed to the municipalities and they can then use it efficiently, say for circular economy within their areas. Which would be significant because there are so many grassroots level things that can be improved and need investment. Especially from an entrepreneurial perspective. Maybe that's an idea as well. I wonder.


Katie: 

Yeah, but I do wonder just from what you're saying there, I think we talked about it a bit before coming on the podcast is when you say small and medium enterprises that can be up to 500 employees, well, 499. So it is that kind of, you know, if it's new initiatives, things that are driving change, grassroots initiatives in different municipalities, great. But when we're talking about really established already global companies getting funding that could be put into smaller businesses that don't necessarily have much of a fighting chance in the current global economy, it doesn't feel as fair. And then you kind of get into that wondering of who's assessing this, who's deciding what's worth putting money in and what's not. It's great the money's being put aside to support these businesses, but at the same time, you start to get into that, what's the fair way to distribute this money? Because, okay, this is a proven solution. People have bought it, there's enough people getting it going, these many people are being employed. Maybe this helps keep that employment base so that the employment rate stays high enough. But then are we losing a lot of new jobs for a really interesting new concept that just has a bit of bad timing when it comes to the global economy? So it's, it's good. But also, who's managing this behind the scenes?


Kalpita:

Yeah, I need, I need more details and I need more structure to this. But to start off with, it's great. I mean, Denmark has a lot of surplus and it's great to invest in within the economy to boost it. And I think it's a great thought. We will probably by next year or mid next year, talk again about how this has gone, which I look forward to.


Katie: 

Yes, a full review. Let's see what happens. But that's a good time to jump into our.


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Katie: 

Second topic. Scat has opened the annual update and people are encouraged to review the income and deductions for 2026. So we have a good year coming in 2026. We've talked about all the tax cuts that are coming. Electricity is getting cheaper. Yay. Fantastic. But to absolutely make sure you don't wind up with a big, scary bill early next year, have a Look at your preliminary tax assessment. And that is open now. I know when I first came to Denmark, the tax situation felt very scary because in Ireland, it's just done for you the way it's done here. It felt a little more American because you had to fill in stuff. And then everyone was telling me about these horror stories of how they accidentally wound up with a huge bill, like 3,000 kroner, 8,000 kroner, when they were kind of coming around. Is it March or April? When do we get that scary email that's like, please check your taxes. And then it's either a green number or red number.


Kalpita:

It's around. I think it's around March. And then you get money in May.


Katie: 

And that goes into your. But anyway, I suppose this is important because it was actually fine, I think when I first moved here, I was working remotely, so I had to say, this is how much money I'm going to make. And then I would pay the taxes that way. And then I got there and I was like, oh, I even hired an accountant for an hour to be like, am I doing this correctly? And it was actually extremely straightforward. I did not need to pay that person. They're very helpful and they made me feel better, so it was worth the money.


Kalpita:

That's nice.


Katie: 

But I. It was completely fine, but it just felt so scary. And then I started to realize, like, where it really gets difficult for people is when you're a student, when you have multiple jobs, when you have income coming from multiple places, because that's when you need to be able to say, this is how much money I'm going to make. And actually, kind of counterintuitively, there was a year I was working remotely for an Irish company from Denmark, and then I knew I was going to quit, so I was only going to work for the first three months. And then I obviously would. I'd take a break. And then I was obviously hoping I would get another job, but I didn't know. And I said to my partner, like, should I just assume, like, the amount of money I'm going to get make? And she was like, no, you should actually post as little income as possible, because then you're going to be taxed more heavily and then you'll get money back at the. At the next time for tax returns, because if you go too high, you get more tax relief and then you don't pay enough money in your taxes. So it was kind of counterintuitive to me, but that served me well. And it kind of acts like a little Bit of a savings account. If you have the room to do that.


Kalpita:

Yeah, okay.


Katie: 

But otherwise, because I've been in salary positions that are full time, I've had to do nothing. But I still get really frightened every single year. So I suppose it's kind of a chance to say have a look at your preliminary tax assessment. But it's not as scary as it might seem. Sometimes it feels a little too straightforward. But if you have one source of income and you're working that way, it's really, really easy. If you have more than one source of income, maybe ask for some help. That's my impression. What's your experience been?


Kalpita:

It does help to talk. It does also help a lot to call the tax customer service. Maybe don't do it right away because there will be a huge, huge, huge queue. Yeah, maybe wait to January and find out that okay, this is how your life is going to work out. Especially if you're a freelancer or you work on project basis or you're planning to start on business or something like that, which is anything but salaried person or unless a job jobless, of course, then you don't really need to do much.


Katie: 

There you go. That's the solution.


Kalpita:

Yeah.


Katie: 

Who needs money?


Kalpita:

Yeah, but call them and get all your answers from them. And if you have any questions about what is this deduction and what is that benefit, then they are very patient and they will answer all your questions. So it is very handy to call them and get information directly from the source. Especially if you are doing this for the first time or you've been here for a while and you find it very scary. It also helps to look at your previous paperwork if you've had any previous paperwork. That will also give you an indication. I think you can also. You can also get help from the municipality to understand and there are many, many courses out there that are free to understand the tax system, to understand how your deductions work and how you can tax clients and customers as well. So those come in handy too. I think we have inclusions in the newsletter once in a while for understanding the tax system and stuff like that. So you guys can keep an eye on that too.

Katie: 

I think there's quite a few webinars that come out specifically for internationals who are navigating the system for the first time.

Kalpita:

And they're in English.

Katie: 

Yes, we love English. Yeah, it's a great time. I'll also say make sure to double check all the things that you can get tax relief on. I just learned. Well, I learned A few months ago, but I was afraid of the tax system, so I didn't go in. But I will do it now. Thank you last week in Denmark for making me be an adult. That you can get tax relief for your payments to the acasa. So that's your unemployment fund and for your union payments. So there's a lot of things for tax relief. Also for your transport costs. I don't get that because I live so six minutes from my office. The dream. But I know my partner gets quite a lot of money back for how much she has to travel to get to work. Because she works in two places.

Kalpita:

Yeah. Okay.

Katie: 

So make sure you're getting all the tax relief that you're due because Denmark is expensive enough.


Kalpita:

Yes, yes. Yeah, that's true.


Katie: 

Let's move on to our next topic then. This is the final topic, but I think a lot of people are going to be very excited about this. So this is tougher rules for home rentals. So this is the government planning stricter limits on short term rentals and new powers to stop shadow hotels. So this is where I love this shadow hotels. It feels more appropriate for like a Halloween timing, but we'll take it in November. But these are new rules where the government can more closely watch people who are renting out their properties on Airbnb and booking.com so that they can catch out landlords who are exceeding the limit on how many days they can rent out their property without becoming essentially a hotel and a constant income stream for people. So there is a 70 to 100 day limit. So the limit is 70 days, but the individual municipality has the option to raise the limit to 100 days. So if you're on holiday or away from your home for 100 days, you are allowed to rent that out. But if you go above that, there are now going to be much easier ways for the government to penalize you through, first of all, taking down your listings. If they find out from Airbnb or booking.com that you have been renting out for more than that limit, they are going to then take that down from the websites. But they are also going to fine you a hugely significant amount. What we thinking about this, Kalpita? You look excited.


Kalpita:

Yeah. Wow. Is it just 100 days a year? Excellent. I think it's great. I live in Copenhagen and fortunately I don't live in the center of Copenhagen, but I have worked there many times and I have seen innumerable amounts of the password protected key boxes. Those are in numerous numbers all across center of town. And surprisingly, I found out that there is someone renting in our apartment buildings. And we've had times where someone has tried to mistakenly, in the middle of the night, around 1, 2 o', clock, casually trying to open our door and using the key they have to open our door, which was very scary. But at the same time, to have strangers in your apartment building is very, very unsettling as well, especially when you're not informed and especially when people do not sort of have any rules or ideas of how things work around here. I was also asked one time when I was going down the staircase of, is this the apartment that we have rented? And I'm like, how would I know? But it's not my apartment and I have no idea that my neighbor is renting out to you guys. It is bit strange and uncomfortable and I think it's very, very important that those restrictions are in place. Let's not forget it's also very expensive to have an apartment here. And people have like five, six apartments, which they only purely rent out as holiday homes through the year, not only limited to the summertime, so that's affecting the housing market as well. And especially for a place like Copenhagen, where it is, as it is difficult to get a home or the rents are like skyrocketing. So I think it's a great policy and I hope it works. I really, really hope that they come down strict on this thing. Not that I don't like tourists, don't get me wrong, love them, they're very important for us. But no, just go get a hotel.


Katie: 

Yeah, it's also. It's too easy for someone who just happens to have more than one property just slightly undercut a hotel and because it's so expensive, just slightly undercut it and then suddenly the hotels are losing business. But then, as you say, that's less properties for people to actually buy. What I really like about this policy is they seem to be like, we're doing this right now. So there is this kind of. Yeah, we could do an online system and it could track these things, but that would cost the taxpayers money and it would take a number of years. So they're like, we're going to do this on a system whereby you, as a neighbour, Kalpita, can say, this has been rented out a huge amount. I think you should investigate this property of my neighbour because I think it's gone a little bit too far, which I think is great, because it is that kind of way. It's no cost to us as the everyday citizen, but it Is trying to take down this habit or this kind of. It's been too easy, I think, to just turn property that you got from your parents or that maybe you're able to afford. I'm saying that because I cannot afford. Afford property to just rent about and not live in it and kind of just stop this kind of extra income coming in that, like, this could be a home for somebody else. I think I know from Ireland, this is a huge, huge problem that they've ignored for a long, long time. So Ireland, I think a lot of people know in Dublin city there is a huge rental crisis. But part of it as well is that a lot of the places that you can rent are just not fit to live in. We have a lot of mold problems. Mold, not moles, just to be clear. Because I had an instant visual there that was much funnier, But I'm sure it's still terrifying. We had a lot of, like, building scandals. I think we have this terrible thing where. And a lot of governments have this where when they're building something, they have to put it out to tender.


Kalpita:

Yeah.


Katie: 

And then whoever kind of get has the. The cheapest one, they have to go with that one. But people just lowball it, and then it winds up being far more expensive than it is. We have this culture of trying to build things as cheaply as possible.


Kalpita:

Yeah.


Katie: 

Like, I know where my parents live. We had a pyrite scandal, which is this cheap cement that they started to use, and they would mix it in with normal cement, but within pyrite cement, there were small pieces of metal. So when there was a lot of rainfall, or if you're like, where my parents live, which used to be a floodplain, it meant that the concrete would expand, and then you start seeing cracks in all the houses. So you'd go like, God, that's terrible. But actually, we recently had a scandal in Donegal, which is in the kind of more northern part of Ireland. Just houses started disintegrating because they used this. I think there was, like, sand in the cement or something, but literally the houses started to crumble. So it's like you're paying huge amounts of money for property that isn't up to code, that's not really livable, or like, I lived in a Dublin apartment, and it was about 20 minutes from the city center, walking distance. And we got it. We got it quite cheap because my partner at the time was a lawyer, and there was, like, a secret lawyer code that, like, the lawyer owned the apartment. So they'd give each other like, reasonable rent. But when we left, I felt a huge difference in my lungs because I feel like there was something in there. It was like when you took down a picture, there was a shadow on the wall from where the picture had been, and we don't live there for a year and a half. So it's like, this is not. I don't know what that could be. This isn't good for my insights. So it's like, lots of people are living in these kinds of places because they're the only thing that's affordable. But then there's like 5,000 Airbnbs all along the main streets of Dublin because no one's regulating it in any way, shape or form. And I feel like the politicians own half the Airbnbs and that's why nothing's being done about it. So something coming in that's this strict. And then where they're specifically like, we need to make sure that the financial penalty for exceeding the 70 or 100 days is so high that no one's going to try and exceed it. So it can't be that, you know, we're going to fine you 25,000, but, like, you could make 100,000 before we catch you. It needs to be so high that this just stops right here, right now. And I think that's what pretty much every government has to do before this gets way too out of control. Because it is. It's those minor things. Like, we. It's a little bit different, but we have this thing in our apartment called for non. So I think it's like a company rents out these apartments and they'll have, like, people stay because they come to the city a lot.


Kalpita:

Yeah.


Katie: 

But like, little things, like, they don't know to not put pizza boxes in the trash chute. And then our trash chute gets completely blocked up and our handyman has to spend all his time unclogging it. And then he does this thing, which I think is appropriate. He leaves them all in the lobby and he's like, who did this? But then it's those bigger effects on housing and just cities being unlivable in because there is space, but just no one can access them because they're being rented out to tourists.


Kalpita:

Yeah. Love the pizza box shaming.


Katie: 

I know, right? But I feel like he always writes a really polite note. Like, he'll always have, like, a piece of paper with an arrow being like, please note that the pizza boxes do not go in the trash chute. Please dispose of your pizza boxes in the big bins. Across the street. And it's like, that's very nice, but this looks very scary when it's just dismembered pizza boxes bent out of shape.

Kalpita:

I'm all for polite shaming, but I think this is also a way of telling people that what you're doing is absolutely unacceptable. Also, because you are blocking the market for so many other people who can. Can get. I mean, students, people coming from outside of Copenhagen especially, they do require. Even if they get su. It's not easy to. To be a student. And that's sad, because Denmark is known to be a country where it's actually really good to be a student. And you get so much support just to be able to have a good education. So housing market needs to be controlled. And this is the first step I think the state is recommending that we take, which is great. Closer to a better solution. Although I would like to have my house continue being appreciated so I can leave and get something better with the garden.


Katie: 

I miss having a garden too. Yeah, I kill all my plants so I can't make a fake one.


Kalpita:

That's fine. You see, you have a partner. I have a husband. We can just have them mow the lawn and maintain that.


Katie: 

I left her with a basil plant and she watered all the plants around the basil plant, but not my basil plant. And I was like, you've killed the basil. She's like, you didn't say that was my responsibility. I'm like, what?


Kalpita:

Yeah.


Katie: 

Why do you hate basil?


Kalpita:

Basils are thirsty.


Katie: 

Yes, exactly. But also, if you see it's wilting in all of the other. Why not. Why not just put a dribble of water in? I was gone for like three days. Anyway, we're getting off topic. That's the end of the podcast for today. Thank you so much for your time, Kilpita.

Kalpita:

Thank you for this wonderful, fun conversation.

Katie: 

Until next time, thanks for listening. Bye.


Kalpita:

Bye.

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LWID

Host
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Kalpita Bhosale

Guest
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Katie Burns

Guest