Taxation of pilots and cabin crew

Key factors influence which country and rule a pilot or cabin crew is to be taxed by

It can be difficult to understand the taxation rules for pilots and cabin crew working in international aviation for an airline based and headquartered abroad. There are some key factors that determine in which country and by what rule a pilot or cabin crew should be taxed.

Three key issues are:

1. Where is the establishment (headquarters of management) operating the aircraft based?
2. Is the aircraft used in international traffic?
3. In which country is the pilot or cabin crew resident?

There are, of course, other personal circumstances which can have an impact in the taxation of a pilot or cabin crew working for a foreign airline. These can be, for example, the tax status of the pilot or cabin crew, number of days abroad and life interests, etc.

For the past few years, the Danish Tax Agency has had pilots as their area of control, and this has led to significant changes as well as a tightening of the interpretation of the rules governing the taxation of pilots working in international traffic for a foreign airline. The decisions of the Danish Tax Agency have contributed to major and financial consequences for the pilots concerned.

If you have been offered a position with a foreign airline operating in international traffic or are currently employed by a foreign airline operating in international traffic, we advise you to seek specific advice. As a starting point, you should check which country has the right to tax and whether you have correctly and adequately declared yourself to the Tax Agency over the years.

Employee benefits and pensions

Another factor that pilots and cabin crew overlook in the context of their tax returns is the staff benefits from their foreign employer. The most normal staff benefits for pilots and cabin crew are diets, life and health insurances. Please note that all employer-paid employee benefits are taxable in Denmark. We have learned that the foreign airlines have tried to make use of the rules for tax-free diets according to the Danish tax rules, but after inspection by the Danish Tax Agency they have not fulfilled the conditions for this and the pilots have been taxed on all the diets as personal income. Please note that there are special accommodation rules for flying personnel.

For foreign pensions, even if they are privately subscribed or employer-managed, there is a duty of disclosure for these pension schemes to Denmark. We recommend that you examine which scheme your foreign pension schemes fall under in the Danish tax legislation, and at the same time inform the Swedish Tax Agency.

Social Security

Social security can be difficult to deal with, and it is difficult to know in which country you are covered by social security. The rules are complicated and changes occur due to EU regulations.

For pilots and cabin crew residing in Denmark and working as flying staff in two or more EU countries, the country in which the staff is based is considered to be the country in which they are socially secured. The home base is the place where the person concerned normally begins and ends a period of service and where the airline is not normally responsible for the accommodation of the crew member concerned.

However, there are some special rules for EEA countries, Switzerland and countries outside the EU with which Denmark has concluded special agreements. For flights to other countries outside the EU, the home base rule may not apply, where the authorities must decide between themselves using the special agreements in which the person concerned must be socially insured.

It is the responsibility of the employee and the employer to check where they are socially insured. We recommend that pilots and cabin crew are vetted to see if they are social secured in the right country. This is done by contacting the responsible authority of the country in which the person concerned resides.

Contact Us

If you need advice or assistance with your tax return, please feel free to contact us. We would like to talk about how we can help you and what solutions you need.

If you wish to be contacted by SkatteInform Statsautoriseret Revisionpartnerselskap, CVR no. 35394206, please use our contact form below. Your personal data will be processed in accordance with the General Data Protection Regulation. You will be contacted in order to respond to your enquiry as best as possible.

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Disclaimer

‍The above information is for guidance purposes only, and we accept no responsibility for decisions made based on this information without prior individual advice. We accept no responsibility for errors or omissions.

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