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Taxation of expats in Denmark

Expats can optimize Danish taxation


Taxation of expats working in Denmark.

The Danish tax level is very high, the tax rules are very complicated and strict interpreted and the Danish language hard to understand. This combination scares many expats or makes many angry or ready to fight to limit the taxation.

However if an expat lives temporarily in Denmark many options to optimize the taxation exists.

The important issue is to prepare a tax plan and do it before arrival in Denmark.

Without tax planning an expat will be hit severely in Denmark by the income taxes, so an expat needs a Danish tax advisor to be sure that his or hers personal and economic interests are taken care of.

We will not describe all options but give you an overview by listing different tax saving options:

• Applying the special 25% expat tax regime
• Maintain tax domicile outside Denmark if possible
• Avoid settling in an expensive municipality
• Avoid Danish state church tax
• Obtain travel deduction or receive travel allowance
• Obtain deduction for double house holding
• Obtain special expat deduction
• Obtain double personal deduction
• Obtain deduction for interest expenses (foreign or Danish)
• Obtain deduction for pension contributions
• Being paid by a company where the majority of the shares are held by the owner of the company
• Applying the work force hire rules
• Obtaining children benefit pay
• Applying the Danish social system
• Asking for double taxation treaty protection
• Avoid annualisation of income
• Asking for mileage deduction or mileage allowance

This shows that the options are numerous and are to be found.

If you need assistance and advice from Inwema, don’t hesitate to contact us at

We can also prepare your preliminary and final tax returns.


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