Denmark

EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY
Tax rate Progressive income tax rate: 40,2 % – 56,5 %
Comprise of at least:
• Labor market contribution
• Bottom tax
• Health contributions
• local tax (Council tax)
– A deduction from income tax is granted as a personal allowance to each individual and amounts to DKK 46.000.
Capital gains tax rate: 27  % – DKK 0 – 52.900
42 % – DKK 52.900+
Tax period Calendar year
Tax residency / Domicile according to domestic law Persons are deemed to be domiciled in Denmark for tax purposes :
• They have a home available in Denmark
• they have the centre of their economic or personal interests in Denmark.
• their main place of residence is in Denmark (present for 183 days or more in a calendar year)
• Citizenship to Denmark
A person will be regarded as resident in Denmark if any of the above conditions is met.
Non-residents are taxed only on income and capital gains deriving from sources in Denmark.
Tax registration Social Security Number is necessary in order to receive employment in Denmark.
Employment income definition Cash salary, director’s fee, free company car and free telephone – less pension contributions.
Examples of tax exemption Contributions to Danish social security (ATP), labor market contribution, and to Danish pension schemes are deductible from the personal income as well as certain business expenses.
Specific expatriate concession Income tax rate for expatriates: 33 %
Comprise of:
• Local tax of 26 %
• Labor market contribution of 8 %
Income of board members Cash salary and other employee benefits are treated as other income and is included the personal income.
Tax returns Each taxable person shall file the return in which is detailed incomes and profits derived during the tax period (a year), and certain expenses.
Tax returns are filed electronically. The deadline for changes to the tax assessment is the 1st of May.
Deadline for extended tax returns and other special tax returns is 1st of July.
Outstanding tax, eg. overpaid tax, will be credited by SKAT.
Tax payments The tax and the labor market contribution are withheld by the employers as the final settlement of the tax liability.
Deadline for extended tax returns and other special tax returns is 1st of July.
TAX TREATIES
Employment income / income from board members Art 15/16 Model OECD Tax treaties.
INTERNATIONAL SOCIAL SECURITY
Cross border employments EU Regulation No 883/2004 and EU regulation No. 1408 / 71.
Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
Generally applicable.
Social Security Cost as % from gross salary and absolute amounts The Danish social security system is composed of various schemes providing a wide range of benefits.
Labor market contribution of 8 % and Danish social security (ATP).
This system includes social security basic coverage (sickness, maternity, disability, work-related accident benefits and old age state pension), unemployment benefits, compulsory complementary retirement plans, complementary death/disability coverage and complementary health coverage.
The contributions are shared between employer and employee. The employer pays 2/3 and the employee pays 1/3.
IMMIGRATION
Work permit Swiss, EU and EEA nationals do not need a work permit to work in Denmark, due to Article 45 – free movement of workers.  Nationals of another country need to obtain a work permit following a specific scheme. To learn more, visit https://www.nyidanmark.dk/en-GB/You-want-to-apply/Work
Visa Swiss, EU and EEA nationals do not need a visa to enter into Denmark.
Non EU, EEA nationals need a visa. The applications have to be lodged at the Danish consulate or embassy in the country of residence.
Residency permits / registration certificate EU and EEA nationals do not need a visa to enter into Denmark.
Non EU nationals in general need to apply for a residency permit. Different residency permits exist.
Driving license Driving licences issued in other EU, EEA countries are recognized in Denmark.
People may exchange their license to grant Danish driving license (although it is not obligatory).
Persons who have no usual residence in Denmark may drive a motor vehicle in this country if they are in possession of one of the types of driving licences listed in section 116 (1) of the Executive Order on Driving Licences (kørekortbekendtgørelsen).
STOCK OPTION PLAN Warrants/stock options are regulated by the Danish Stock Option Act. The main requirement for the act to apply is that the person who is granted warrants/stock options is an employee. Tax exemption can be enforced when certain criteria are met.
ARTICLE 15 OF THE OECD MODEL
183 days
Notion of employer
Existence of a permanent establishment