Cross-border taxation
In an increasingly internationalized world, it is becoming more common for individuals to have income from multiple countries, each with its own tax laws.
Global taxation rules
In most countries, residents are taxed on their worldwide income. This also applies to individuals living in Denmark. Denmark can tax all income, regardless of its source. Some countries offer a “resident but not domiciled” status, under which only income sourced in that country is taxed.
Regardless of personal tax status, most types of income are also taxed in the country where they are earned. For example:
- A Danish company must pay Danish tax even if its owner lives abroad.
- Rental income from a property in Germany can be taxed by Germany, even if the owner resides in Denmark.
This often results in double taxation of the same income.
Optimizing cross-border taxation
When managing cross-border tax matters, it is essential to consider:
- Taxation in the source country.
- Taxation in the residence country of the rightful owner of the assets or income.
- Whether a double taxation agreement exists to allocate taxing rights between countries.
- National relief rules that may allow a foreign tax credit or exempt certain income from Danish tax.
Our services
At PrivatRevision, we can assist with a wide range of issues related to cross-border taxation for individuals, helping you navigate complex rules and optimize your tax position.