Global Taxation

Full tax liability in Denmark

You are fully liable to tax in Denmark on your worldwide income if you are resident here. For Danish citizens living in Denmark, residence is inherent and only ends if you effectively move abroad, giving up both your home and employment in Denmark.

When you cease full tax liability in Denmark, you become subject to limited tax liability, meaning you remain taxable in Denmark on income sourced here. This interacts with your tax liability in your new country of residence, involving both national law and double taxation agreements, often resulting in a complex and differentiated framework.

Becoming fully taxable in Denmark

• If you move to Denmark from abroad, you become fully taxable once you spend more than 180 days within a 12-month period, or if you spend 3 consecutive months with a home available and for vacation only.
• If you perform work in Denmark while having a residence permit, full tax liability begins immediately.
• If no residence is available, full liability begins after 183 days of stay.

Once you are fully liable to tax in Denmark, all foreign assets and income must also be reported and are subject to Danish taxation. Proper registration upon moving to Denmark helps ensure compliance with global taxation requirements.

Complexities in changing tax residency

Changing full tax liability from one country to another can be complex. Challenges arise from varying interpretations of:

• “Residence” and “stay”
• “Performing work”
• “Residence available”

These definitions are often subject to tax disputes between individuals and authorities, making it not always straightforward to determine whether you are fully taxable in Denmark.

Advisory services on global taxation

At PrivatRevision, we assist with clarifying tax residency issues and navigating the opportunities and obligations that arise when becoming taxable in multiple countries or transferring tax residency from one state to another. We help analyse your situation, identify the relevant tax issues, and determine the most appropriate approach.

Think of it like a visit to the dentist: you may not need to treat every tooth. Similarly, when changing tax residency, the goal is to address the relevant tax matters efficiently. The rules are complex, but we help ensure that the right matters are handled correctly.