Amendment to the Danish expert tax scheme for foreign researchers and highly paid employees
The amendment adjusts one of the current criteria for using the Danish expert tax scheme (Articles 48 E-F of the Danish Tax at Source Act). With the amendment it becomes possible for an employee who is a Danish tax resident to use the expert tax scheme even though the employee works outside Denmark and becomes liable to tax outside Denmark of up to and including 30 working days within a calendar year.
With the current legislation, one of the conditions for using the Danish expert tax scheme is that employees who are residents in Denmark must not work outside Denmark in such a way that the salary in accordance with a double taxation treaty becomes taxable outside Denmark. In some cases, the current legislation excludes employees who work a few days outside Denmark from using the expert tax scheme.
The amendment represents the opportunity for employees to be tax liable outside Denmark up to and including 30 working days within a calendar year. The 30 days include all working days. Partial working days such as having a meeting count as one working day.
The amendment is e.g. relevant for employees in a Danish company who perform work for the company’s permanent establishment outside Denmark where the foreign country has the taxation right to the salary.
The amendment may also be relevant for employees who work in Denmark for a Danish branch of a foreign country’s company and sometimes perform work for the head office in the foreign country.
In both cases, the employees can use the expert tax scheme if they do not become tax liable outside Denmark for more than 30 days within a calendar year.
The amendment becomes effective for work performed outside Denmark as from 1 January 2017.