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Denmark – Amendments to the specialist tax regime for individuals who have not been subject to Danish tax for a minimum of 10 years

Written by
Norrbom Vinding, the largest labour and employment law practice in Scandinavia and the market leader in Denmark.

The Danish specialist tax regime has been amended with effect from 1 January 2019. The regime provides for a flat tax rate of 27% for up to seven years. When taking into account the effect of the Danish labour market tax of 8%, the effective tax rate is 32.84%.

The amendments involve changing inconvenient technicalities to make the regime more flexible. In broad outline, the amendments mean that:

  • the tax regime can now apply to employees seconded to a branch of a company operating in Denmark – not only to a Danish subsidiary;
  • the requirement for an employment contract between the Danish employer and the employee is eased, for example so that a secondment agreement between the foreign employer and employee may be sufficient;
  • employees on childbirth-related leave during their stay in Denmark do not risk losing their eligibility under the specialist tax regime; and
  • employees who plan to return to Denmark for work (and to re-join the specialist tax regime) do not risk losing their eligibility because, for example, they have received a bonus payment whilst not in Denmark.