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.

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