A new social security agreement with China takes effect

24 April 2014

On 14 May 2014, a social security agreement between Denmark and China takes effect.

Denmark and China have concluded a social security agreement covering social pension including Danish ATP.

The agreement takes effect from 14 May 2014.

For Danish enterprises posting employees in China, the agreement facilitates exemption from paying contributions to Chinese old age pension with 28 pct. of the employee’s salary for up to 3 years.

Further, the employee and his accompanying family continue to accrue and retain rights to Danish social pensions including ATP.

The importance for Danish enterprises of a social security agreement between Denmark and China increased when the Chinese social security system was extended on 1 July 2011 to include foreign employees working in China and their foreign employers.

The agreement enables Chinese employees posted in Denmark by Chinese enterprises to remain covered by Chinese social security. In such cases, the agreement facilitates exemption from paying both employee and employer contributions to ATP.

The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge.