ECOVIS Ringsted

Taxinformation

Double taxation

Denmark has made double taxation agreements with a number of countries

When you are subject to full tax liability; you have to pay tax on all income earned in Denmark as well as abroad. This means that foreign income that has already been taxed abroad will also be subject to Danish tax rules. To prevent people from being taxed in more than one country, Denmark has made double taxation agreements with various other countries defining which country has the right to tax what types of income.

These agreements apply to people who are legally subject to tax liability in 2 different countries. In double taxation agreements, the rule is that the country of residence taxes the income but also grants an allowance for the income on which the other country has the right to tax.

When calculating the tax rate, the country’s double taxation agreement with Denmark is taken into account. Danish taxation may fully or partially lapse if you can provide documentary evidence that your income is taxed in another country. It is your own responsibility to apply to the local tax administration for a tax reduction.

There are several methods for calculating tax when income from several countries are involved. The individual double taxation agreements specify which method of calculation is used.

Denmark has entered into double taxation agreements with the following countries:
Argentina, Australia, Austria, Bangladesh, Belgium, Brazil, Bulgaria, Canada, China, Cyprus, the Czech Republic, Egypt, Estonia, the Faeroe Islands, Finland, France, Germany, Great Britain, Greece, Greenland, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Latvia, Lithuania, Luxemburg, Malaysia, Malta, Mexico, Morocco, the Netherlands, New Zealand, Norway, Pakistan, the Philippines, Poland, Rumania, Russia, Singapore, Slovakia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Turkey, the Ukraine, the USA, Vietnam and Zambia.

Double taxation agreements with the Former Soviet Union apply to the states that are members of the CIS (except for Kazakhstan and Turkmenistan). The double taxation agreement with the Former Yugoslavia is now used in connection with Croatia, Macedonia, Slovenia and the Federal Republic of Yugoslavia (Serbia/Montenegro).

Even if no double taxation agreement has been entered with a specific country, it may still be possible to get a tax reduction.