International Staff Mobility > Taxation
Taxation in Denmark
The Danish society is known as a welfare society and based on the concept of citizens having equal access to different services paid for by taxes such as health care, child care, education and more.
The general rule is that foreign employees are covered by social security in Denmark and, therefore, pay taxes incl. social contributions (e.g. labour market contributions and special schemes) in Denmark.
Within your withholding rate, labour market contributions are not included but are deducted separately from your pay before the tax is calculated. Taxes consist of “direct” and “indirect” taxes. Direct Taxes are taxes that are deducted directly from your income e.g. by your employer from your pay or property tax.
The total withholding tax consists of:
- State Tax
- Municipal tax
- County Tax
- Church Tax
For more information about Danish Tax (SKAT) please visit SKAT’s website (in English)
Rates are the same irrespective of where you live in the country but based on your income.
It is divided into three categories based on your income level:
- Bottom-bracket Tax
- Middle- bracket Tax
- Top- bracket Tax
The principle behind this division is based on a “progressive” tax system which is that those who make the most income must also proportionately pay more tax to the state.
Each municipality determines the tax percentage that its citizens must pay. Your total tax contribution will therefore depend on the municipality that you live in.
83% of Danish population are members of the Danish National Evangelical Lutheran Church (Folkekirken). The members pay church tax and it covers the running and maintenance of the churches in the municipality. This tax varies municipality to municipality.
Labour Market Contributions
Labour market contributions are used for the government’s labour market expenses e.g. cover cash benefits, training and leave of absence.
Registering for Tax
If you have recently moved to Denmark, you must register with your local National Registration Office. You will be required to have your Civil Registration Number (CPR number) and report to your nearest tax centre your personal income data so that your personal tax can be calculated. The tax centre will also issue you with a tax card.
Twice a year, Skat will send you computed tax information for you to check and approve. Once you are registered with Skat you will be able to edit and correct your tax figures online. To locate your nearest tax centre address please review www.skat.dk
Regardless, of the type of employment and length of stay in Denmark, you will need to contact the tax authorities to settle your tax issues. When you present your case to the tax authorities, they will calculate your tax percentage and possible tax deductibles. Your local tax authorities will issue an e-tax card or a personal tax ID number to you, depending on the length of your stay and your country of residence.
If you reside in another country you still need to contact a Danish tax centre, e.g. if you are a cross-border commuter, you must contact Skat Øresund.
You will need to take the following:
- Letter of employment
- Photo ID
- Marriage certificate (if you are married, as this might influence your tax percentage)
- Residence certificate from your home country (if any, as this will influence your tax percentage)
- Residence and work permit.
- Special tax conditions apply for researchers and key employees
If you are employed at the University of Copenhagen as a Postdoc, Assistant Professor, Associate Professor or Professor, you can choose a flat rate tax of 26% for a period of 60 months. An additional mandatory 8% labour market social contribution will be added.
In order to be covered by the flat rate tax of 26%, it is a requirement that you have not been tax liable to Denmark 10 years prior to your employment at the University of Copenhagen.
In order to apply for the flat rate tax, you must follow these steps:
- Register with the civil registration office and obtain a CPR number
- Fill in the special researcher taxation form and submit it to your Department.
- You or the personnel administrator of your department must send the completed form to International Staff Mobility for further processing
- ISM will send your application to the tax authorities, which will confirm registration after a handling time of up to two months.
Special Tax Conditions for Cross-Border Commuters
Be aware that special tax rules apply to cross-border commuters, e.g. if you live in Sweden or Germany and work in Denmark.
Cross-border commuters are subject to limited tax liability in Denmark. You must choose whether you want limited tax liability or – if more than 75% of your income is earned in Denmark – opt for the special cross-border commuter tax scheme.
Depending on which tax scheme you choose, various deductibles will apply, such as transport deductibles, personal relief deductibles, spouse deductibles, etc. You can also ask ISM to apply for the Special Tax Scheme for Researchers on your behalf. In order to settle your tax and receive your personal tax ID number, contact Skat Øresund at Sluseholmen 8B, DK-2450 Copenhagen SV.
You will need to take the following:
- Your signed letter of employment from the University of Copenhagen
- Your national ID card (personbevis)
- Your passport.
For detailed information on the special tax conditions applying to cross-border commuters, visit SkatOresund’s website www.skat.dk or www.oresunddirekt.com. Special taxation for cross-border commuters. If you commute over national borders and maintain residence in a foreign country, special limited tax obligations apply.
Every year, Øresund Direkt arranges information meetings with SKAT Øresund and Skatteverket on how to fill in the Danish annual tax return (årsopgørelsen). Please follow this link to see the dates for this year.
Social security contributions Social security contributions consist of an 8% labor market contribution paid on wages and benefits. For more information about Danish Tax you can download the brochure "Tax in Denmark - An Introduction for New Citizen"
Danish Welfare System
The majority of the Danish welfare system is financed via taxes. The general rule is that foreign employees are covered by social security in Denmark and, therefore, pay taxes incl. social contributions (e.g. labor market contributions and special schemes) in Denmark.
Foreigners working in Denmark are usually covered by the Danish social security legislation as soon as they start working. There is, however, certain fixed waiting periods for some services. Depending on your country of origin, special rules apply for some services.
Danish Taxation Process
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.
There is a special taxation 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 five years, the possibility of being taxed 26 % (plus 8% labor market contribution) of their income.
Click here to make a calculation of your researcher´s tax (MUST ADD A LINK)
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 PhD-level = position as Postdoc/Assistant Professor or higher grade).
Procedure to follow:
- Register with the local office of the National Register
- Apply for a CPR.-number
- Ask the head of your institute to approve and sign the form
- Send the signed form to the Personnel Department
The Personnel Department will send a request for registration under the 26 % tax scheme to Skattecenter Tønder. Skattecenter Tønder usually confirms the registration within a few weeks.
No tax card is needed in these cases. For more information about tax for researchers and key employees: