Denmark offers a special tax regime to highly paid inbound expatriates and researchers recruited from abroad. Through an application to the tax office, the employees may elect to be taxed at a rate of 27 % on employment income and other cash allowances, for up to 84 months. All other income, including benefits in kind other than a company car and free telephone, are taxed at the ordinary rates.
Conditions for expatriate taxation
- Employees must earn a minimum of DKK 66,000 gross per month, before the deduction of Danish tax, social security contribution and any pension contributions.
- The employee must become a resident or a non-resident for tax purposes in Denmark in connection with the commencement of the employment. The 27 percent tax scheme does not apply to an employee considered treaty tax resident of Denmark performing work outside of Denmark under such circumstances that the right to taxation shifts to another country/territory according to a double tax treaty.
How long is the tax rule valid for?
Employees can take advantage of 27% taxation for up to 84 months. After 84 months, the employee can stay in Denmark, however they will have to pay the prevailing tax rates. No additional tax payment is required relating to the income earned in the first 84-month period.
If the employee has been utilising the tax scheme for a shorter period than 84 months and he/she leaves Denmark, he/she can return to Denmark at a later point and continue to utilize the 27 % tax scheme for a total up to 84 months – provided that the other requirements are still met upon their return.
How TCP can help
TCP have a fully registered Danish company, TCP APS, that can help you with the employment of skilled labour and also with the application for the 27% tax ruling. Whether you are an individual going over to Denmark to start a new role, or an agency looking to place a skilled temporary worker on site with a client, TCP can help. You can find more information about working in Denmark here, or feel free to contact us anytime on the below telephone number or our enquiries email address, and we can discuss the options available.
TCP contact number: 0044 208 5800 800
Enquiries Email Address: email@example.com