Emigration from Denmark

If one resides in Denmark, they are subject to full taxation on their global income here. Emigration entails that one is no longer fully tax liable to Denmark.

When one completely relinquishes their residence in Denmark and relocates to another country it is seen as emigration from Denmark. Upon emigration, one ceases to be fully tax liable to Denmark on their global income and will subsequently only have limited tax liability in Denmark on any income and assets they may have here. This can include, for example, rental properties located in Denmark.

It is somewhat more complex to emigrate from Denmark and thus exit full tax liability to Denmark than it is to enter. However, there are often intermediate steps to consider – at least if one is not relocating permanently.

When one emigrates from Denmark, they must completely give up their residence, which means selling or leasing their property on a non-terminable basis for at least 3 years. Upon emigration, one is no longer required to report their foreign income to Denmark, as they are exiting full tax liability to Denmark.

If one emigrates, they will be subject to an exit tax on their tax-relevant assets when these assets leave Danish tax competence. This means that assets such as securities, stocks, bonds, properties outside Denmark, certain pensions, and others will be taxed as if they were realized on the date of emigration. This is also known as “exit taxation” and is designed to ensure that assets accumulated while residing in Denmark are also subject to taxation in Denmark, especially upon emigration when the jurisdiction of Danish tax authorities is naturally limited.

There are often many factors to consider before deciding to emigrate from Denmark. If one plans to be abroad for an extended period, there can be advantages, especially if significant income is expected during these years or if they intend to have their assets exit-taxed with the goal of increasing in value while outside of Danish tax liability.

Another argument for emigration may be the intention to stay outside of Denmark for more than 10 years and subsequently consider returning to Denmark under the researcher tax scheme with a flat tax rate of 27% plus AM contributions for 7 years.

However, considerations regarding emigration should always be weighed against any plans for returning to Denmark in a few or many years. For some, emigrating may be favorable, while for others, it may be a better solution to be seconded or simply change their tax residency.

Feel free to contact us for specific advice on relocating to and from Denmark.