Taxes
The welfare system in Denmark is mostly financed via taxes. Foreign employees are usually covered by social security in Denmark. When you live and work in Denmark you must pay taxes to the Danish State. Taxes help pay for the Danish welfare system, such as health care, child care and education.
There are several ways in which you can be taxed. When you gain employment in Denmark, it is important that you investigate which tax scheme you will be covered by.
Income tax
Income tax in Denmark consists of:
- A national tax
- A municipal tax
- A health care contribution
Members of the Evangelical Lutheran Church in Denmark must also pay church tax.
Special tax scheme for researchers
There is a special tax scheme for researchers and key employees who are recruited abroad and who are employed by a Danish company or research institution. Researchers who are recruited from abroad have, under certain circumstances, and for a period of maximum 60 months, the possibility of being taxed 26 % (plus 8% labor market contribution) of their income.
You must be approved by both the University and the tax authority. The head of your institute will, on behalf of the University, assess and approve both your employment in a research position as well as your qualifications (at least a PhD degree = position as Postdoc/assistant Professor or higher grade).
Procedure if you want to apply for the special tax scheme:
- Register with the local office of the National Register
- Apply for a CPR-number
- Fill out this form in close cooperation with your institute and remember to get the head of your institute to approve and sign the form: http://www.sdunet.dk/Vaerktoejer/Skemaer-og-skabeloner/Ansaettelser/Beskatning-udenlandske-forskere.aspx
- Send the form to the salary office
The salary office will send the application to the tax office.
For more information about tax for researchers and key employees:
http://www.skat.dk/display.aspx?oId=97319&vId=204401
Ordinary income tax
If you don´t qualify for the special tax scheme for researchers you must apply for a tax card at the tax centre. This can be done as soon as you have a CPR number. Bring a copy of your contract with you.
Social security contributions
Social security contributions consist of an 8% labour market contribution paid on wages and benefits.
Cross-border commuter
If you commute over national borders and maintain residence in a foreign country, special limited tax obligations apply. SKAT determines the degree of your tax obligations in Denmark.
For more information:
www.skat.dk
https://www.workindenmark.dk/Find%20information/Til%20arbejdstagere/Skatteregler.aspx