The Danish tax scheme for foreign researchers and highly-paid employees (Forskerordningen)
Researchers and key employees from Sweden or other countries who are employed in Denmark have the opportunity to be taxed at 32.84% (8% AM-bidrag and 27% A-skatt) for a period of up to 7 years. The Danish forskerordningen is usually advantageous over the conventional income tax in Denmark, which is significantly higher.
When can you make use of the Danish forskerordningen?
Skattestyrelsen in Denmark has chosen to define the researchers as:
-persons carrying out research work at a university or a private company
- and who also have postgraduate education at PhD-level as a minimum.
Key employees are people who have a high salary of at least DKK 72.450 per month (2023) + ATP contributions. There are no formal education requirements for key employees.
What does the Danish employer need to
Within eight days of becoming liable to withhold income tax at souce, the employer must fill in form no. 01.012A (for resarchers) or form no. 02.12B (for highly-paid employees) and submit it to Skattestyrelsen at the address stated at the top of the form.
The employer must enclose a copy of the contract of employment together with any documentation concerning mandatory foreign social security, any approval of qualification as a researcher as well as any other necessary documentation. It is not necessary to enclose a copy of the contract of employment for approved researchers.
What happens next?
Skattestyrelsen decides whether the employer and the employee meet the requirements for the special tax. The employer will also receive a message with information on how the tax is to be paid during the researcher/key employee's employment.
If you are commuting from Sweden to Denmark
If you live in Sweden and commute to your job in Denmark, your salary will only be taxed in Denmark. This applies as long as the work is only performed in Denmark –or, in case you are employed in a private company, at least 50 percent of the working days during each three-month period are in Denmark.
Since you live in Sweden, you are a Swedish tax resident. This means that you are taxed in Sweden for all other income except salary for work performed in Denmark. Even if you only work in Denmark, you need to provide information about your Danish salary in the Swedish annual income tax return.
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Declaring tax when working in Denmark
If you work and pay tax in Denmark, you must also declare tax there. You can do this easily online on the website for the Danish Skattestyrelsen with a MitID. If you live in Sweden while working in Denmark, you also have to file an income tax return in Sweden.
Deductions - taxation under the cross-border rule
If 75% of your total income (calculated according to special rules) comes from Denmark in one income year, you can decide to be taxed according to the cross-border rule. The way that you are taxed affects which deductions you have the right to declare on your Danish declaration.