How to Leverage Denmark’s Special Tax Scheme with an Employer of Record (EOR)

Denmark offers an attractive tax incentive aimed at helping companies recruit and retain highly skilled international professionals. The Danish Special Tax Scheme allows eligible foreign employees and contractors to pay a flat 27% income tax rate (plus an 8% labour market contribution) for up to 7 years, significantly reducing the cost of working in Denmark compared to the standard tax regime, which can reach up to 52%.

Key Benefits

• • Flat Tax Rate: 27% income tax + 8% labour market contribution (total effective rate: 32.84%)

• • Long-Term Advantage: Valid for up to 84 months (7 years)

• • Simplified Filing: Less complex than traditional Danish tax processes

• • Stronger Offers: Enhances compensation packages to attract international talent
    
    

Eligibility Criteria

To qualify for the Special Tax Scheme in Denmark, the following conditions must be met:

• • Recruited from Abroad: The applicant must not have been a tax resident in Denmark within the last 10 years.

• • Minimum Salary: The monthly salary must exceed DKK 78,000 (2025 threshold, updated annually).

• • No Ownership: The individual must not hold a controlling interest in the hiring company.

• Valid Employment Contract: Must be legally employed under a Danish employment contract compliant with local regulations.

Why Combine with an EOR?

Northern Partners offers a fully compliant Employer of Record (EOR) solution that works seamlessly with Denmark’s Special Tax Scheme. We employ the contractor or professional on your behalf, ensuring all legal, tax, and HR obligations are met.

What We Offer:

• • Legal Employment: We act as the formal employer in Denmark.

• • Tax & Compliance: We handle all withholdings, social charges, and Special Tax Scheme applications.

• • HR & Payroll Administration: We manage contracts, benefits, and reporting.

• • Reduced Risk: We absorb legal liability while you retain operational control.

• • Fast Hiring: Start in days, not months—no Danish entity required.

• • Cost Efficiency: Avoid setting up a subsidiary just to access talent in Denmark.

• • End-to-End Solution: From initial setup to end-of-contract de-registration.
    
    

Ideal For:

• • Companies testing the Danish market

• • Remote-first teams with employees in Denmark

• • Organisations needing rapid talent deployment

• • Businesses offering tax-optimised compensation packages
    
    

Get Expert Help

Our team of international employment specialists will guide you through the entire process, from eligibility assessment to payroll and ongoing compliance.

Ready to unlock Denmark’s Special Tax Scheme for your international hires?
Contact Northern Partners today and simplify cross-border hiring with a tax-optimised EOR solution.