Individuals on a short-term secondment to Denmark may opt for a 25% final withholding tax on the gross remuneration for up to 3 years.
A new bill has changed the conditions for the favourable taxation. The main changes are:
- The individual must not have been taxable in Denmark as a resident or a non-resident (e.g. due to salary for work performed in Denmark or a fee as a member of the board of a Danish company) in the 3 years preceding the beginning of the assignment
- It is no longer a condition that the employment contract is time limited. Employees with an open-ended contract will be able to opt for the 25 tax scheme
- In order to avoid back taxes the individual must terminate the status as a resident for tax purposes for an uninterrupted period of 3 years no later than 7 years after the beginning of the contract. In the 3 year period the individual must not become taxable in Denmark for work performed in Denmark for the previous employer or an employer within the same group of companies
The bill has passed the Danish Parliament. However, it will not have effect until it has been approved by the EU-commission.
For further information, please contact Esben Christensen, KPMG Copenhagen by facsimile on +45 38 18 30 51 or e-mail: Click Contact Link or visit the KPMG Denmark website at Click Contact Link
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