10. How to Avoid Double Taxation

Double taxation in Denmark - How to avoid it 

Even if you are fully taxable to Denmark, it does not mean that you must pay tax on the entirety of your global income to Denmark. The deciding factor, is where your income originates. Denmark has Double Taxation Agreements with several countries. These agreements ensure that taxpayers are not taxed twice. These agreements determine which kinds of income can and will be taxed.


If you are Danish and fully taxable in X country, Double Tax Treaties will decide which country has the right to be your “country of residence”. This often depends on the following four criteria, listed in order of importance:


  1. The location of your permanent residence
  2. The center of your “life interests”
  3. Length of stay
  4. Nationality

Double Taxation Agreements have precedence over a country’s internal rules. At the same time, they require each country to tax incomes following their own internal rules, before the DTA can take effect. This means that even though you may be fully taxable to Denmark, it may not be your primary country of tax residence. Regardless, you must still report your global income to the Danish authorities.


It is worth noting that if you are indeed taxable to Denmark, and you neglect to report your global income, you can face serious consequences including incarceration.


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*SkatteInform does not take any responsibility for any actions taken based on the information provided in this article, before receiving individual tax advice.