The favourable tax scheme is changed materially in two ways - one change tightens the rules, and one change makes the scheme more attractive. The changes took effect on 1 January 2011.
With the recent changes in Danish taxation of individuals with effect from 2010, salary income is ordinarily taxed according to a progressive scale at a rate of up to 55.4 % (2011, and including labour market contribution).
With the changes in the special favourable tax scheme for foreign individuals, salary income can optionally be taxed at a marginal taxation rate of 31.9 % (including labour market contribution) for 5 years.
The use of the scheme is subject to certain conditions.
According to the newly implemented strengthening of the rules, if an employee wants to benefit from the scheme, it is a condition that the employee has not been subject to unlimited - or limited - taxation of salary income/earned income etc. within the last 10 years preceding commencement of the employment subject to the favourable tax scheme. Earlier, this period was only 5 years effectively.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
