At PrivatRevision, we have extensive experience in the taxation of individuals and business owners who move to or from Denmark. We also have significant expertise in international assignments, the researcher tax scheme, exit taxation, and international tax planning from a Danish perspective.
If you are moving to or from Denmark, or undertaking an international assignment, professional advice is often highly relevant. Small differences can have a major impact. The same applies if you hold assets abroad while living in Denmark, or assets in Denmark while living abroad.
In many situations, income or assets may be taxable in two jurisdictions – both where the asset or income is located and where you are resident. When moving from one country to another, it is often necessary to determine the point in time at which a person, income, or asset becomes taxable in one jurisdiction, the other, or both.
The regulatory framework typically consists of Danish tax law, foreign taxation rules, and any applicable double taxation treaty between the countries involved. In many cases, taxpayers may have several options to choose from.
In recent years, there have been a number of cases where taxpayers, following finely balanced assessments, have been either exempted from or subject to taxation. These may involve significant amounts, where entire annual incomes are either taxable or not taxable in Denmark. The consequences can therefore be substantial. The good news is that many challenges can be resolved through planning and a solid understanding of the rules – including in cases that have previously led to penalties.
Careful planning, thorough preparation, and often proactive dialogue with the tax authorities frequently resolve issues before they arise, often resulting in a more favourable outcome for the taxpayer.
We have extensive experience with inbound relocation to Denmark, both for individuals who wish to move to Denmark and for those who wish to stay in Denmark without necessarily becoming tax resident here. There are also variations such as dual residency, where tax residency is aligned with the country to which the individual has the closest ties. In addition, a range of special provisions apply under Denmark’s many double taxation treaties.
If you are moving away from Denmark, there are typically several matters to consider, including the timing of your departure – and whether exit taxation applies to your shares. It is also important to assess whether you are in fact regarded as having left Denmark for tax purposes, or whether you remain subject to Danish tax liability, for example if you only rent out your former home on a short-term basis.
We also assist individuals who are posted abroad, or foreign nationals assigned to Denmark under standard employment conditions or under the researcher tax scheme.
If you are moving to Denmark with foreign pensions, it is also often advisable to seek advice. There can be significant differences in how foreign pensions are treated for Danish tax purposes. While Danish pension taxation rules are relatively uniform, double taxation treaties can result in very different treatment of foreign pension schemes.
Another area of expertise is inheritance planning. Here, we combine our knowledge of Danish inheritance law and tax optimisation of estates with in-depth expertise in international tax matters. In particular, we have specialised knowledge of trusts, tied-up capital, and other arrangements where heirs and testators are not resident in the same country.
At PrivatRevision, we specialise in international taxation for private individuals. Please feel free to contact us or see the examples below of our core services in international tax.
