Special rules favouring researchers and key employees recruited abroad
As an expert or a researcher, you only have to pay a gross tax of 27% for 84 month your earned income instead of the ordinary income tax. However, you lose your right to allowances.
As an expert or researcher, it is possible to be allowed to pay a gross tax of 27% of the salary income instead of the regular income tax, for the first seven years (84 months) of employment. In return, one loses any rights to deductions. (Persons liable to tax under the 27% tax scheme must also pay social security contributions amounting to 8%. This means that employees covered by the scheme may have a total minimum tax of 32.84 %).
The employer may be Danish or a foreign company or institution with business premises in Denmark, or a foreign company with operations in Denmark.
A few general conditions must be fulfilled in order for the rule to apply.
The requirements for when the conditions are met may vary depending on whether:
One is hired as a researcher with research qualifications, or the job is genuine research work.
One is recruited to a specialized or managerial position (key employees) Condition.
One must become fully liable to taxation in Denmark at the commencement of employment. If one is hired to do research work, this requirement no longer applies. The scheme may also be utilized by persons of limited tax liability on certain conditions.
One may not have had full or limited tax liability in Denmark on salary income or income from businesses for up to 10 years before. Nor may one have been stationed abroad by the employing company.
The monthly gross salary must be at least 65,100 DKK (2018). To this must be added labor market contribution and the Danish Labour Market Supplementary Pension or any mandatory foreign social security contributions. The income requirement does not, however, apply to researchers employed to carry out research work, and whose qualifications are accepted by a public research institution or the research councils.
One is not permitted to have had a controlling interest in the company through co-ownership for five years prior to employment. Managers can be covered by the scheme, though.
Kurt Bülow State Authorised Public Accountant, Partner +45 5766 2462