The 25% Personal taxation scheme
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
