Expertise
Double taxation
For anyone fully tax liable in Denmark with income from abroad, such as salary, pension, dividends or rent. We explain how relief is calculated and why it is so often lost.
When two countries tax the same income, treaties and domestic relief rules determine how double taxation can be reduced.
We identify the appropriate method, assemble supporting documents and assist if the Danish Tax Agency takes a different view.
How we can help
- Taxing rights under treaties
- Credit, exemption and section 33 A
- Planning the documentation
- Reporting foreign income
- Reopening earlier years where relief was missed
When can Denmark tax your foreign income?
If you are fully tax liable in Denmark, you are generally taxed on all your income, wherever it is earned. Denmark has double tax treaties with a large number of countries, and they allocate taxing rights between the country of residence and the country the income comes from.
Which rule applies depends on the type of income. Salary, pensions, dividends, interest and real property are treated differently, and the same person can have income that follows different rules.
What is the difference between credit and exemption?
Under the credit method, the income is taxed in Denmark, but you get a deduction from Danish tax for the tax paid abroad. The deduction cannot exceed the share of Danish tax that relates proportionally to the foreign income.
Under the exemption method, the foreign income is not taxed in Denmark, but it is taken into account when the tax on your other income is calculated (exemption with progression). Which method applies is set out in each treaty.
Where there is no treaty, you can claim credit relief under section 33 of ligningsloven (the Tax Assessment Act). For salary from work abroad lasting at least 6 months, section 33 A can give full or half relief if the conditions are met.
What does section 33 A require?
You must stay outside Denmark for at least 6 months, and the stay may only be interrupted by holidays or necessary work in Denmark totalling no more than 42 days in any 6-month period. The stay must be connected to your employer's circumstances, and the rule only covers employment income.
Relief is given as exemption with progression. If Denmark has the taxing right under a treaty, private-sector employees only receive half relief, and special rules apply to public-sector employees. The burden of proof for both the 6-month and the 42-day rule lies with you.
How do you document relief, and when is it too late?
Relief is not given automatically. You must report the foreign income, choose the method and document the tax paid. If the source country has charged more than the treaty allows, the excess must be reclaimed there, not in Denmark.
If relief has not been given, your tax assessment can generally be reopened until 1 May in the fourth year after the income year. After that deadline, special circumstances are required.
- Employment contract and any work permit
- Payslips and the foreign tax assessment or proof of payment
- Travel days and evidence of your stays if you use section 33 A
Frequently asked questions
How do I avoid paying tax twice on foreign income?
You must report the income on your Danish årsopgørelse (annual tax assessment) and claim relief under a double tax treaty or Danish domestic rules. Relief is given either as a deduction for foreign tax (credit) or by keeping the income out of Danish tax (exemption). Documentation of the foreign tax is a precondition.
What is the difference between credit relief and exemption relief?
Under credit, the income is taxed in Denmark and you get a deduction for the foreign tax, capped at the Danish tax on that income. Under exemption, the income is not taxed in Denmark, but it can increase the tax on your other income through the progression rule. The treaty specifies which method applies.
When can I use section 33 A of the Tax Assessment Act?
When you earn salary for work abroad and stay outside Denmark for at least 6 months, with no more than 42 days in Denmark in any 6-month period. The stay must be due to your employer's circumstances. You must be able to document that the conditions are met.
What should I do if too much tax was withheld abroad?
If the source country withheld more than the treaty allows, you must reclaim the excess from that country's tax authority. Denmark only gives relief for the tax the source country is entitled to. The claim must follow the other country's rules and deadlines.
Can I claim relief for earlier years?
Yes. As a rule, you can request a reopening until 1 May in the fourth year after the income year. For example, a request to reopen 2022 must be received no later than 1 May 2026. After the deadline, reopening requires special circumstances.
What does this mean for you?
This page is general. Your own situation may be different, so talk to us before you act on it.