LL §33A - Danish tax when working abroad

Are you aware that Denmark has introduced internal tax relief rules that allow you to save taxes when you work abroad? Using LL §33A, you can get full or half tax relief if you meet the conditions. Read here and see if you meet the conditions!

Date 26/08 2022

Persons with available residence in Denmark who work abroad must, as a rule, pay Danish tax on their wages, and thus the foreign income must be included in the tax information form. Danish income taxation is based on the principle of global income. This means that persons who are fully taxable in this country are liable to tax on their total income, whether it comes from Denmark or from abroad.

In order to avoid being taxed in more than one country, Denmark has introduced internal tax relief rules and concluded double taxation agreements with different working countries.

The internal leniency rules are set out in the Equation Act (LL) §33 and LL §33A:

• LL §33 entitles the right to Credit relief, meaning that Denmark must provide relief for the tax paid on wage income in the other country. A reduction with tax paid abroad provides no overall tax saving, but must be understood as a rule that distributes the tax between two countries.
• LL §33A gives the right to Exemption relief, which means that Denmark must grant relief for that part of the total calculated Danish tax that falls proportionally on foreign income. In other words, foreign income is not actually taxed in Denmark, although the rule may result in higher taxes on other income.

In order to use LL §33A, there are some conditions that must be met.

• The person must reside outside Denmark, the Faroe Islands and Greenland for at least six months
• Holidays and days off in Denmark may not exceed 42 days in any 6-month period
• During the stay in Denmark, no work is allowed, except for any necessary work, such as reporting. These days count towards the 42-day rule.
• Wage income must be obtained by personal work in service conditions

The rules are strict and in some cases can be more complicated than just meeting the conditions.

Half easing

If you work for a country that, like Denmark, has entered into a double taxation agreement (DBO), it is important to examine who has the right to tax wages. If the DBO grants Denmark the right to tax income from wages, you cannot get full tax relief, but instead be subject to the rules on half relief.

Service for the Danish State or other public authority abroad

If you serve the Danish state or other public authority abroad, you cannot receive full relief, but instead be subject to the rules of half tax relief or no tax relief, depending on the tax exemption in the determination of wages, the payment of tax-free travel allowance or whether it is a system export.

Documentation requirements

The Danish tax authorities have strict requirements for documentation when using LL §33A. In particular, it deals with documentation of the 42-day rule, the 6-month rule and your employment relationship.

• Inventory of days of residence in Denmark
• Inventory of days of stay abroad
• Employment contract
• Other documentation (e.g. airline tickets, bank statements, etc.)

What can we help you with?

We have created a travel calendar to help you register your days of stay in Denmark, country of work and holiday respectively. By filling out the form, you will get an answer as to whether you fall under the 42-day rule, which is crucial to whether you can get full tax relief under LL §33A. This can also be used as evidence along with any airline tickets or other underlying documentation that the tax authorities will ask for.

Externally:

• Assessing whether you can get full, half or no relief
• How is your salary taxed in Denmark when working abroad
• Help with the reporting of salary income to SKAT
• Assistance regarding the conditions of LL §33A
• Assistance in relation to Double Taxation Agreement (DBO)
• Using LL 33A or DBO (Which scheme is most beneficial for you)
• Professional advice on your situation.

Please be more than welcome to contact one of our professional tax advisors for further questions.

Furthermore, if you want relief for tax on foreign earned income under LL §33A or under a double taxation convention, you can access a system that helps you document your travels and stays by clicking on the link below and thus create an overview of whether you comply with the rules for obtaining a reduction in Danish tax.

https://ll33a.dk/udlandsophold/

SkatteInform is happy to assist with advice and reporting to the Swedish Tax Agency, just as we are happy to assist in tax matters.

Contact SkatteInform

We provide qualified answers to your tax questions. If you are interested in assistance with the calculation of taxable income, we are happy to provide you with a fee upon further agreement.

Call us by phone 33 32 10 10

Send an email at info@skatteinform.dk

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Frederiksborggade 54 1. tv
1360 Copenhagen K

We do not accept responsibility for any dispositions that may be made on the basis of this newsletter without prior individual advice. Likewise, we do not accept responsibility for any errors and omissions.

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