Tax liability

Full tax liability means that as a general rule all your earned income (salary and income from capital - also from outside Denmark) is subject to taxation in Denmark. To be fully liable to pay tax to Denmark you must either stay in Denmark for six months consecutively or be resident in Denmark.

Even if you buy a house in Denmark, you will not become subject to full tax liability until you move to the country. However, you may stay here for a period not exceeding three consecutive months, or for 180 days within any 12-month period, without becoming fully liable to tax. This presupposes that your stay is in the nature of holidays and is not associated with any form of gainful employment.
 
Even if you have not moved your residence to Denmark, you will become subject to full tax liability if your uninterrupted stay here exceeds six months. Tax liability will also apply even if, within the six months, you have interrupted your stay for a brief sojourn abroad on account of holidays etc. Tax liability will apply from the beginning of your stay in Denmark.

If you own property outside Denmark or have non-Danish income, you should remember to declare this.  
 
Special rules apply to diplomats, EU employees and seamen.

During your first year as a taxpayer in Denmark, your income will be adjusted to represent a full-year income so as to allow for the graduation in the Danish tax system. Based on the adjusted full-year earnings, a full-year tax will be calculated which is then reduced according to the ratio between the part-year amount and full-year amount, so that you will be paying tax only on the amount you have actually earned. 

Conversion into full-year income

If you move to Denmark on 1 August and earn for example DKK 100,000 (net of labour market contributions etc.) in the period 1 August to 31 December (153 days), the result would be as follows:

Conversion into full-year income (example)

Income and tax	DKK
Earned income/personal income 1.8. - 31.12:	100,000
Taxable income net of employment allowance 1.8 - 31.12:	97,282
Annual earned income/personal income DKK 100,000 x 365 days / 153 days:	238,562
Annual taxable income net of employment allowance:	232,078
Annual state tax of DKK 238,562 is:	11,052
Annual municipal tax etc. of DKK 232,078 is:	62,602
Part-year tax (state tax): DKK 11,052 x 100,000 / DKK 238,562:	4,633
Part-year tax (municipal tax etc.): DKK 62,602 x 97,282 / DKK 232,078:	26,241
Total tax: DKK 4,633 + DKK 26,241	30,874

If you have income from Denmark without living here, you may be subject to limited tax liability to Denmark. This implies that you are taxable on your Danish income but that you remain fully tax-liable in another country. The income may be in the form of, for example, pay or fees for work performed in this country, fringe benefits or pensions. 

The lowest overall tax rate for taxpayers subject to limited tax liability is 36% (in 2014).

If you own real property in Denmark without having your permanent address in this country, you will also be subject to limited tax liability. You will then be paying property value tax.

Personal allowance

Persons having limited tax liability and receiving pay etc. for work performed in this country are entitled to a personal allowance if the income period represents an entire income year. If you work in Denmark for a period of less than one year, you can choose to have your income converted into income for the full year and combined with your Danish personal allowance. If you do not choose this option, you will be taxed according to current rules, i.e. on the basis of the actual income earned while in Denmark, but your personal allowance will not be used.

If you wish to have your income converted into income for the full year and combined with your personal allowance, you should tick box 69 in the tax return for taxpayers with limited tax liability. You can do so in E-tax (our self-service system - TastSelv) under ’Ret årsopgørelsen/selvangivelsen’ (Change tax assessment notice/tax return).

Cross-border workers etc.

If you live in another country but work in Denmark and travel back and forth regularly, you are considered a cross-border worker. If, as a cross-border worker, you earn most of your income (at least 75%) in Denmark, you are entitled to tax deductions and allowances for expenditure incurred in connection with personal and family circumstances (such as interest expenses, maintenance payments and unemployment fund fees) to the same extent as persons subject to full tax liability with their permanent address in Denmark.

You will then need to enter supplementary information in the ’Grænsegængerdata’ (Cross-border) section of your tax assessment notice/tax return. You do so by logging on to our self-service system E-tax (TastSelv) and selecting ’Ret årsopgørelse/selvangivelse’ (Change tax assessment notice/tax return). If you have difficulties using E-tax, you may alternatively complete the paper tax return for taxpayers with limited tax liability (form no. 04.009) and, if needed (for example if you did not receive a tax assessment notice), the supplement to tax return for taxpayers with limited tax liability (form no. 04.031).

Form 04.009 Tax return for taxpayers with limited tax liability

Form 04.031 Supplement to the tax return for taxpayers with limited tax liability

Double housekeeping

If you are temporarily resident and working in Denmark and, at the same time, maintaining a dwelling for your family back home, you can claim a double housekeeping allowance, provided that you are subject to full taxation in Denmark.
 
An allowance will be granted for the initial 12 months counting from the time of your moving to Denmark.

For further information, please see

Travel deduction and tax-free allowance

You are entitled to the allowance if you are married or have a regular cohabitee and have had so for at least one year. In the case of marriage or cohabitation for less than one year, the allowance may be granted on the basis of a specific evaluation. Your spouse/cohabitee need not necessarily be tax-liable in Denmark for you to be granted the allowance. 

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