A tax of only 27% sounds like utopia for most people, but it is actually what Denmark offers certain highly-paid employees as well as researchers who are recruited from abroad to work in Denmark.
To be part of this scheme, there are several conditions that are important to consider. This could, for example, be related to:
- Fulfillment of the minimum wage requirement (not applicable to researchers)
- Taxation rules of other personal income
- Taxable value of free housing for employees
- Time limit and transition to general tax rules
- Change of employer during stay
- Handling and reporting of tax returns
- Assessment of full or limited tax liability to Denmark
The 27% tax is applicable for up to 84 months. There is nothing to prevent the employee from staying in Denmark after this period and transiting to taxation according to the general rules. That is, with higher tax rates. In cases where the stay is extended beyond 84 months, there is no post-taxation of income during the first period.
If you have questions about your specific issues, you are welcome to contact one of our tax experts without obligation.