Personal incomes, including all forms of salary and capital gains wherever arising, are subject to taxation in Denmark once you have exceeded 180 days in the country. Tax levels are set very high, with the top bracket currently at 63%.
A reduced rate tax scheme exists for foreign sportsmen and women and specialist workers. If your company can prove that you have a recognised specialism that they cannot find in Denmark, such as certain research scientists, you may be eligible for the scheme. You may not, however, apply if you have been tax resident in Denmark in the three years prior to starting your contract. If successful in your application, you will pay tax at a fixed rate of 25% on all of your earnings.
People residing in Denmark pay various kinds of tax. Key among them are:
- Direct tax on personal income
- Indirect tax, e.g. VAT and duties on goods and services
- Property tax
- Church tax, members of the state church only
Denmark has a graduated taxation. That means that the more one earns, the more tax one pays.
Danish tax includes a contribution to the Danish church. When you apply for your CPR-number (social security / personal number) you should make it known if you are not a member of the church as you will not be obliged to pay the tax. For more detailed information on taxation in Denmark, please log onto:
http://www.workindenmark.dk/Taxation
Update 29/04/2008
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Main characteristics
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