Tax

While staying abroad, employees are generally still fully liable to pay tax in Denmark. However, special rules may apply.

Therefore, it is a good idea for the employees to clarify their tax position with the Danish Tax Agency before leaving for a stay abroad. Corporate HR can help with an initial discussion and to establish contact to the Danish Tax Agency.

You can read more about stays abroad at skat.dk.

Below follows a brief description of various situations which may have tax implications.

In connection with stays abroad, you may be asked to provide documentation that you are liable to pay tax in Denmark. To do so, use form 02.034, Certificate of residence and tax liability.

Danish citizens

Danish citizens who are posted abroad by DTU remain fully liable to pay tax in Denmark. In most cases, they will be exempt from paying tax in the country in which they are working thanks to a double taxation treaty between Denmark and the country in question.

Non-Danish citizens

When posted abroad by DTU, non-Danish citizens will not always retain their full Danish tax liability. If an employee is no longer liable to pay tax in Denmark while staying abroad, it is important to clarify which country’s rules apply. Often, the employee will be covered by the rules of the country in which the employee is resident, which is usually the country in which he or she is working.

Read more at skat.dk.

Employee must remember to report their move to the Danish Tax Agency using form 04.029.

Employees covered by the researcher taxation scheme

A posting/permanent place of employment abroad may mean that you are no longer covered by the researcher taxation scheme on your return to Denmark/DTU.

It is not possible to return to being covered by the scheme if you are posted abroad while simultaneously no longer being subject to Danish tax liability. In connection with your return to the position in Denmark, you no longer meet the condition that your employment must commence at the time when you become subject to Danish tax liability, as you have been employed for the duration of your stay abroad.

Corporate HR may be able to help clarify your position, and help you contact the Danish Tax Agency.

Employed on an individual contract with work abroad for min. six months

Employees can apply to pay less Danish tax on their salary if they have a permanent place of employment abroad for a minimum of six months, and if they are still subject to Danish tax liability. See more in Section 1 of the Danish Act on Tax at Source (Kildeskatteloven). There are a number of conditions associated with this. Employees must, among other things, be employed on an individual contract. Corporate HR can help clarify whether the stay should be based on an individual contract, or whether it is covered by a collective agreement.

Read more about the terms and conditions and the special rules for public-sector employees at skat.dk.

Cross-border commuters

If you live in one country and work in another, you are considered as a cross-border commuter. Cross-border commuters are generally taxed in the country of work, i.e. Denmark for employees at DTU, Technical University of Denmark.

It is recommended that employees contact the Danish Tax Agency to hear more about the taxation rules for cross-border workers.

A special agreement has been made with Sweden which covers salaried employees who either live in Denmark or Sweden and work in Denmark or Sweden. The agreement maintains the principle that cross-border commuters pay income tax in the country in which work is carried out. Moreover, the agreement makes it possible to deduct bridge tolls and pension contributions to pension schemes in the country of residence. Read more at skat.dk.

Double taxation treaties

Denmark has entered into double taxation treaties with a number of countries. Double taxation treaties distribute the right of taxation of the various types of income, including salary, and must, in so far as possible, ensure that the same income is not taxed fully in both countries.

Typically, the country of residence will tax global income, i.e. the income from e.g. Denmark and abroad, while granting tax relief for the income tax levied by the country in which the work is performed.

However, the tax relief rules vary from treaty to treaty. It is therefore recommended that employees contact the Danish Tax Agency for more detailed information.

List of countries Denmark have concluded double taxation treaties with.

Obtain a binding ruling from the Danish Tax Agency

It is possible to obtain a binding ruling on common tax issues.

Read more about binding rulings and how to apply.