Denmark

An individual becomes fully tax liable in Denmark by taking up residence — acquiring or renting a home, or being provided employer-paid accommodation, and staying beyond a short vacation-type visit — or by staying in Denmark for more than six consecutive months even without a home there.

The Danish tax year runs 1 January to 31 December. Provisional tax is withheld against an estimated income, and individuals with full or limited tax liability must submit a tax return with supporting information by 1 May or, in some cases, 1 July of the following year.

Non-residents have limited tax liability, covering only Danish-source income such as salary for work performed in Denmark, directors' fees, pensions and social security benefits, workforce-hire remuneration, income from a Danish permanent establishment, Danish property income, and dividends from Danish companies.

An employment allowance of 12.75% of employment income, capped at DKK 63,300, is available to anyone in active employment. Salary earners may also deduct commuting costs between home and work, costs from working at multiple workplaces, unemployment insurance contributions, and trade union membership fees.

Qualifying expatriate employees and researchers can elect a special flat 27% tax on gross salary for up to 84 months, provided their guaranteed average monthly salary meets a set minimum, with no deductions allowed against that income. A separate work-force-hire scheme taxes foreign workers hired out to a Danish host company at a flat 30% of gross remuneration, again with no deductions, for those not otherwise fully or ordinarily liable to Danish tax.

Businesses must register for VAT once sales of goods and services exceed DKK 50,000 in a 12-month period; registration is optional below that threshold.

Danish VAT law distinguishes exempt supplies under Section 13, such as hospital treatment, insurance and reinsurance, and most financial activities including deposits and loans, from zero-rated supplies under Section 34, such as intra-Community supply of goods and services; only the latter carries a right to deduct input VAT.