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LEGAL NEWS - Amendments of The Special Tax Scheme for Researchers (”forskerskatteordningen”)

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13. December 2017

On 16th November 2017 the Danish Parliament has proposed an amendment to the favorable researcher taxation scheme, making it even more favorable for researchers and key employees recruited from abroad. Today, highly paid employees and researchers, who are recruited from abroad, and who fulfill certain conditions, have the opportunity to work in Denmark for a period of 60 months under a special 26% tax rate, instead of working under the regular income taxation.

According to the proposal of the Danish Parliament the tax rate of 26% will be increased to 27%. At the same time the period of 60 months will be increased to 84 months. This means that highly paid employees and researchers, if the proposal is adopted, will be able to work in Denmark under the special tax rate for 7 years instead of the current 5 years.

On 5th December 2017, the proposal was on the agenda for the first reading of three readings in the Parliament. Under this reading most parties accepted the proposal. The next hearing is scheduled for 15th December 2017 and it can be expected that the proposal will be adopted. 

About the researcher taxation scheme
Researchers and key employees recruited from abroad by a Danish company or a Danish research institution have been able to apply for reduced tax payments since 1992. The rules have since then been amended several times. The purpose of the scheme is to give Danish industry and Danish research institutions better possibilities to attract and retain highly skilled employees from abroad. The scheme applies to all industries, and to both Danish and foreign individuals (if they are recruited from abroad).

Today you can find the rules in §§ 48E – 48F of the Danish (Kildeskatteloven) 

The researcher taxation scheme can not only be used by researchers but can also be used by highly skilled employees. The most important conditions that the employee has to fulfill in order to use the researcher taxation scheme are following: 

  • the employee has to be recruited from abroad, and
  • the employee has to be an approved researcher doing research in Denmark and who is highly educated (at least Ph.D.), or the employee has to be a key employee whose monthly salary in 2018 has to be at least 65.100 DKK + ATP (63,700 DKK in 2017), and
  • the employee may not have been liable to taxation in Denmark in the past 10 years, and
  • the employee must not have been directly or indirectly involved - within the past five years prior to the employment - in the management of or have had control or significant influence over the enterprise where he/she is being employed

If you consider recruiting staff from abroad or if you are going to work for a Danish company or a Danish research institution you should definitely keep the researcher taxation scheme in mind. 

For further information you are welcome to contact attorney Alexandra Huber at alexandra.huber@lead-roedl.dk .

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