Even though the Danish state garnered little from pensions return tax (PAL) last year due to widespread investment losses, lobby group Insurance and Pensions Denmark (IPD) said the levy is large and Danes should be more aware how much they contribute.

Kent Damsgaard, chief executive officer of the lobby group, said: “Therefore, we will discuss with the tax authorities whether figures from the pension companies can appear in the tax return in a simple and flexible way.”

In a statement from the North Copenhagen-based body citing new figures it had produced on the tax, Damsgaard said almost all Danes paid PAL tax, but that few knew how much they paid.

In 2021, IPD said the tax generated over DKK60bn (€8.1bn) for the country’s treasury – far surpassing contributions from property or vehicle taxes in recent years, he said.

“Although the severe economic turmoil means that the tax for 2022 will be very limited, there is no doubt that it will also make a massive contribution to the financing of our welfare society in the coming years,” Damsgaard said.

For many people, he said, the PAL tax they paid in a year was almost as much as their monthly salary.

IPD said PAL tax amounted to 15.3% of the return generated from Danes’ pension savings, and was highest for those just below and above the national pension age.

The lobby group said that in 2021, a skilled bricklayer would have paid DKK20,000 in PAL tax as a 40-year-old, and DKK26,000 as a 60-year-old. In 2022, A 70-year-old state pensioner paid an average of DKK11,600 in PAL tax.

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