Introduction
Thinking of working in Denmark as a foreign professional? The Danish expat tax scheme – officially known as the Researcher Taxation Scheme or Section § 48E – allows eligible employees to pay a reduced flat tax rate for up to 7 years.
In this guide, we explain how the scheme works, who qualifies, how to apply, and how to stay compliant through a Danish employer.
What Is the Expat Tax Scheme in Denmark?
The expat tax scheme is designed to attract highly qualified foreign professionals to Denmark. Instead of paying the standard progressive income tax (which can exceed 55%), eligible employees may choose a flat tax rate of 32.84%, consisting of:
- 27% income tax
- 8% labour market contribution (AM-bidrag)
(The 8% is deducted before calculating the 27%)
This scheme can be used for up to 84 months (7 years) and is available to foreign researchers and key employees who meet specific eligibility criteria.
Who Qualifies for the Scheme?
To qualify, the following conditions must be met:
- You are employed by a Danish-registered company (not self-employed)
- You earn a minimum gross monthly salary of DKK 78,000 (2025 threshold)
- You have not been tax resident in Denmark in the past 10 years
- You must not currently have, or within the past 5 years have had, direct or indirect influence over the management, control, or significant ownership of the employing company
- Your application must be submitted within one month of starting employment in Denmark
Freelancers, B2B contractors, and self-employed individuals are not eligible under this scheme.
What Types of Employees Are Eligible?
The scheme typically applies to:
- International consultants or specialists employed in Denmark
- IT professionals, engineers, life sciences experts, and executives
- Individuals employed through an Employer of Record (EOR) structure
How to Apply for the Expat Scheme in Denmark
Applications must be submitted by your Danish employer or EOR provider – not by you personally.
Step-by-step process:
- An employment contract is signed with a Danish-registered company
- Your monthly salary is validated to meet the required threshold
- Application is filed with the Danish Tax Agency (Skattestyrelsen)
- Once approved, the 32.84% tax rate applies from your employment start date
The application must be submitted no later than 1 month after employment begins. Late submissions are not accepted.
What Happens After 84 Months?
Once the 7-year period ends, you will automatically be taxed under Denmark’s ordinary progressive tax system. The flat rate cannot be extended beyond the 84-month limit.
What Are Common Pitfalls?
- Missing the 1-month application deadline
- Being employed by a foreign entity rather than a Danish one
- Including non-salary elements (e.g. pension or benefits) to meet the salary threshold
- Assuming local freelancers or B2B contractors qualify – they don’t
Can I Use the Scheme via an Employer of Record (EOR)?
Yes. If you are hired through an EOR provider like Northern Partners, we act as your legal employer in Denmark, ensuring your setup and application are fully compliant and submitted on time.
This is especially relevant if:
- You are a contractor working through an agency
- Your client does not have a legal entity in Denmark
- You need a compliant, fast-track solution to work and get paid locally
How Northern Partners Helps
- We set up a fully compliant Danish employment structure
- We handle the expat tax scheme application process
- We manage your monthly payroll, reporting, and tax deductions
- We assist with work permits and immigration if needed
- We act as your local Employer of Record (EOR)
Summary
The Danish expat tax scheme offers a significant tax advantage for foreign professionals in Denmark – but strict eligibility criteria and deadlines apply.
Want to know if you qualify?
Contact Northern Partners to explore your options and ensure a smooth, compliant setup under the scheme.
Disclaimer
The information provided in this article is intended for general guidance only. Requirements, thresholds, and conditions are subject to change and may vary depending on your specific situation. For personalised advice or case evaluation, please contact Northern Partners directly.
