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You Live in Denmark and Work Abroad
You live in Denmark but work abroad
In a situation where you live in Denmark but work abroad, in some cases, you may be able to receive a Danish tax exemption on your foreign income; despite the fact that you still maintain your full tax liability to Denmark. A number of factors are used to determine if this is possible, depending on which model can be used in each case.
In Denmark you can choose to be taxed according to:
- Section 33 of the Tax Assessment Act (credit rule)
- Section 33A of the Tax Assessment Act (fully exempt)
- Double taxation agreement between Denmark and the country, where you work (credit or full exemption)
There is the option to use either the internal easing rules or the double-taxation agreement. Of course, there are a number of conditions that must be met in order to use one over the other. Therefore, it will always be a good idea to investigate which model will be favourable for you to use in advance. We recommend that this should be investigated before commencing work abroad.
Tax Exemption from Danish Capital Gains Tax
If you are posted abroad by a Danish employer, you or your employer may request an exemption from Danish A-tax and labour market contributions. This way, you risk not having to pay advance tax in two countries.
In order to receive the tax exemption, the Danish tax authority requires documentation that you pay tax in the country of employment on the foreign salary income. If you receive an exemption, you will see it on your tax return. However, you cannot receive a tax exemption if you are still paid by your Danish employer.
Though, if you not receive the tax exemption during the current year, you can report the foreign income and have the tax exemption calculated in your annual tax return.
Contact us - Your specialized tax advicer
Different rules apply to different situations, depending on the double taxation agreement between Denmark and the specific country or internal Danish tax rules. You should look into these matters before saying yes to working abroad.
You can always contact us for a free, no-obligations quote. We would like to talk about how we can help you and what solutions you need.
If you want to be contacted by SkatteInform State-Authorised Accounting Partnership, CVR no. 35394206, please use our contact form below. Your personal data will be processed in accordance with the Personal Data Regulation. You will be contacted for the best possible response to your inquiry.