Taxation of foreign assets in Denmark

When you are fully taxable to Denmark and at the same time receive pensions from abroad, these pensions must appear on your Danish tax return. Pensions from abroad are not automatically reported to Denmark.

Pensions are divided into 3 types:

• Social pension, e.g. national pension, early retirement pension, ATP
• Private pension, e.g. pension earned during an employment relationship, or paid privately in a bank/insurance company
• Public pension, e.g. when you have been employed by the public sector, including civil servants' pensions

The taxation of foreign pensions depends on the mutual agreements Denmark has concluded with the other countries. There are both double taxation treaties and international agreements. These agreements explicitly determine which country has the right to tax and how each type of pension is to be taxed.

Foreign persons are taxed differently depending on which pension scheme/life insurance you have taken out abroad.

Wealth

If you have wealth abroad, the value of the wealth must be self-declared each year. For example, it can be:

• Bank Account Abroad
• Property abroad
• Exchange value of listed security held in foreign depository
• Exchange value of unlisted shares abroad

Property abroad

If you own a property abroad, you must pay property value tax according to the Danish rules, but you do get a discount for paid foreign tax on the property.

The property must be registered on your tax return on the same terms as Danish properties. If you have rental income, these must also be included in your tax return.

Foreign properties where the foreign property assessment has not been approved by the Danish Tax Agency must use the acquisition amount of the property as the basis for calculating the property value tax. The acquisition amount is converted (indexed) to the equivalent of the acquisition total in one of these years:

• 2001 with the addition of 5 per cent.
• 2002
• October in the current income year

The lowest value of these three years, is chosen as the basis for calculating the property value tax. This calculation is also called an EVS calculation.

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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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