Professor rule - tax exemption
A number of the Danish double taxation agreements contain a 'professor rule'.
The essence of the professor rule is that a professor or guest lecturer resident in another country who receives remuneration for teaching/research at a university or higher education institution during a temporary stay in a second country, can be exempted from paying tax on the remuneration in the second country.
The aim of the professor rule is to promote the exchange of lecturers and researchers. It is not a condition that the person actually is a professor. The rule also applies to lecturers.
The content and conditions for applying the professor rule vary in the various double taxation agreements. For example, there may be a requirement of tax liability in the home country prior to the stay in Denmark, and a condition of taxation in the home country. Some agreements also require an invitation.
Under most of the double taxation agreements, the stay in Denmark must not exceed two years. If the limit is exceeded, it may trigger taxation with retroactive effect. If it is clear from the outset that the appointment will be for a longer period, it is not possible to obtain a tax exemption.
If the department believes it may be possible to apply the professor rule, Corporate HR should be contacted for further clarification. If the rule applies, Corporate HR will ensure that the request for tax exemption and the department's cover letter are sent to the Danish Tax Agency Udland. The Danish Tax Agency may request documentation for previous tax residency in the country the researcher comes from.
The professor rule can be combined with researcher taxation
You can apply for researcher taxation at the same time as requesting tax exemption. The application for tax exemption must be sent to the Danish Tax Agency Udland together with the application for researcher taxation. Following the period of tax exemption, you will be able to continue under the researcher taxation scheme. The period of tax exemption will be deducted from the 84 months the researcher taxation scheme covers.
Both applications must be submitted via Corporate HR to the Danish Tax Agency Udland.
Researcher taxation scheme not approved
If the researcher taxation scheme is not approved, you must contact the Danish Tax Agency, when the period of tax exemption ceases, in order to be covered by the normal tax rules.
PhD students
PhD students cannot obtain tax exemption under this rule, as they are unable to meet the research requirement (must be at PhD level), and are not primarily employed to teach.
The essence of the professor rule is that a professor or guest lecturer resident in another country who receives remuneration for teaching/research at a university or higher education institution during a temporary stay in a second country, can be exempted from paying tax on the remuneration in the second country.
The aim of the professor rule is to promote the exchange of lecturers and researchers. It is not a condition that the person actually is a professor. The rule also applies to lecturers.
The content and conditions for applying the professor rule vary in the various double taxation agreements. For example, there may be a requirement of tax liability in the home country prior to the stay in Denmark, and a condition of taxation in the home country. Some agreements also require an invitation.
Under most of the double taxation agreements, the stay in Denmark must not exceed two years. If the limit is exceeded, it may trigger taxation with retroactive effect. If it is clear from the outset that the appointment will be for a longer period, it is not possible to obtain a tax exemption.
If the department believes it may be possible to apply the professor rule, Corporate HR should be contacted for further clarification. If the rule applies, Corporate HR will ensure that the request for tax exemption and the department's cover letter are sent to the Danish Tax Agency Udland. The Danish Tax Agency may request documentation for previous tax residency in the country the researcher comes from.
The professor rule can be combined with researcher taxation
You can apply for researcher taxation at the same time as requesting tax exemption. The application for tax exemption must be sent to the Danish Tax Agency Udland together with the application for researcher taxation. Following the period of tax exemption, you will be able to continue under the researcher taxation scheme. The period of tax exemption will be deducted from the 84 months the researcher taxation scheme covers.
Both applications must be submitted via Corporate HR to the Danish Tax Agency Udland.
Researcher taxation scheme not approved
If the researcher taxation scheme is not approved, you must contact the Danish Tax Agency, when the period of tax exemption ceases, in order to be covered by the normal tax rules.
PhD students
PhD students cannot obtain tax exemption under this rule, as they are unable to meet the research requirement (must be at PhD level), and are not primarily employed to teach.
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