Tax, wages and cost of living || page 23
Tax reduction for expats Researchers and key employees from abroad who are in high demand in Denmark can qualify for a special tax programme that reduces income tax rates to 25% for up to 3 years, or 33% for up to 5 years (not including ATP contributions and the 8% labour market contributions). To qualify for the reduced tax rate for employees recruited abroad: • the employer must be Danish (or a Danish branch of a foreign company) • key employees must earn at least DKK 63,800 (€ 8,571) per month before tax but after ATP, labour market contributions or any obligatory foreign tax contributions (there are no minimum salary requirements for approved researchers) • the employee may not have paid tax in Denmark for a period of three years prior to being employed in the new position • the employee may not have worked for another company within the same group for a period of three years prior to, and one year after, no longer being subject to Danish taxes If you are a researcher at an institution covered by the government's Research Institution Act, it is up to the management of the institution to decide whether you qualify as a researcher. Researchers at other institutions are approved by a governmental research council. The OECD definition of research and development is used when evaluating whether a position qualifies. Read more in 'Tax scheme for foreign researchers and key employees (25% or 33% taxation)' at www.skat.dk.