Two recent rulings from the Danish National Tax Tribunal, both dated November 13, 2024, illustrate the strict practice applied when taxpayers seek to utilize the researcher tax scheme.
The purpose of the researcher tax scheme is to incentivize high-income earners to take jobs in Denmark. By utilizing the scheme, a fixed tax rate of 27% + AM contribution (labour market contribution) is applied, resulting in an effective flat tax rate of 32.84%. This flat tax applies to salary subject to A-tax and derived from the approved employment. The scheme lasts for a maximum of 7 years, and it is required that the taxpayer is either employed as a researcher or has a salary exceeding DKK 78,000 per month (in 2025).
To qualify for the researcher tax scheme, several requirements must be met, including the rule that the applicant must not have been tax resident in Denmark within the last 10 years. This is the criteria that the National Tax Tribunal addressed in the two rulings mentioned above.
In both cases, the appellants argued in support of their eligibility for the researcher tax scheme that they had been incorrectly registered as fully tax liable to Denmark for part of the period within the last 10 years when, in fact, they had ceased to be tax resident in Denmark. In a ruling reviewed in parallel with one of the above-mentioned rulings, the Danish Tax Appeals Agency ruled that extraordinary reopening of the appellant’s tax assessments could not take place. Consequently, the National Tax Tribunal determined that the registration on the tax assessment must form the basis for assessing whether the appellant fulfilled the 10-year rule for using the researcher tax scheme.
As a result, the taxpayers could not utilize the researcher tax scheme, even though they had not actually earned income in Denmark and thereby met the 10-year rule in practice.
These decisions follow the precedent established by the Supreme Court’s ruling of February 2, 2024. In that ruling, the Supreme Court stated: “(…) Tax assessments are valid administrative decisions that must be relied upon when determining whether A ‘has been tax liable’ to Denmark as mentioned in Section 48 E, subsection 3, no. 1 of the Danish Tax at Source Act.”
The current legal position, therefore, is that citizens are responsible for ensuring that tax authorities correctly register their departure from Denmark for tax purposes. Failure to do so can have significant tax implications—even if it may not immediately affect your tax payments.
At PrivatRevision, we possess in-depth knowledge and experience with both the researcher tax scheme and tax-related emigration from Denmark. If you are considering leaving Denmark, we are happy to advise you on providing the correct information to the tax authorities.
Given that case processing by the tax authorities often continues for a period after one has physically moved to Denmark and started working, it can also be beneficial to consult an advisor before moving to Denmark. This ensures that you meet all requirements, and your application can be approved smoothly.