Denmark Cross-Border Tax Guide (Non-Danish Income, Foreign Assets)

Living in Denmark with Non-Danish Income

As a Danish tax resident, you are subject to full tax liability (fuld skattepligt) on your worldwide income. This means all income you earn from any source — whether in Denmark or abroad — must be reported to SKAT and is generally taxable in Denmark. However, the practical reporting obligations depend on the type of income and whether SKAT receives it through automatic information exchange.

Types of foreign income: Common types of foreign income that Danish residents must report include: foreign salary (from employment with a foreign employer, remote work for a foreign company, or work performed abroad), foreign pensions (government pensions, private pensions, and retirement accounts from other countries — e.g., UK pensions, US 401(k)s, German Rentenversicherung), foreign rental income (from property located outside Denmark), foreign dividends (from shares in foreign companies — e.g., US, UK, German, or Swiss stocks), foreign capital gains (from selling foreign shares, real estate, or other assets), foreign interest income (from foreign bank accounts, bonds, peer-to-peer lending), and foreign business income (from self-employment or business activities conducted abroad). Each type of income is reported in specific fields on the årsopgørelse. Some income may be pre-filled by SKAT based on automatic information exchange (e.g., foreign dividends from countries that participate in CRS, interest income from EU banks). However, you are ultimately responsible for ensuring all income is correctly reported — you should check the pre-filled amounts and add any missing income manually through TastSelv using MitID.

Specific reporting examples: Foreign salary is typically reported in field 201 or 208 (depending on whether tax was withheld abroad). Foreign rental income is reported as capital income (fields 301–310). Foreign dividends are reported under share income (field 456). Foreign capital gains from shares are reported under field 458. Foreign interest income is reported under capital income (fields 301–302). For each type of foreign income, you may also need to claim a foreign tax credit (dobbeltbeskatningsfradrag) if tax was paid abroad on the same income — this is reported using form 22.037. For a detailed walkthrough of the årsopgørelse, see our Tax Assessment Notice Guide →.

Foreign Tax Credit (Dobbeltbeskatning)

The foreign tax credit (dobbeltbeskatningsfradrag) is the primary mechanism for avoiding double taxation on foreign income. Under Danish tax law, if you have paid tax abroad on income that is also taxable in Denmark, you can claim a credit for the foreign tax paid against the Danish tax on the same income.

How the credit is calculated: The foreign tax credit is calculated on a per-country, per-income-type basis. For each country and income type (employment income, pension, capital gains, dividends, etc.), you calculate: the Danish tax payable on that foreign income (using your marginal tax rate), the foreign tax actually paid on that income, and the credit equals the lower of the Danish tax and the foreign tax. If the foreign tax is higher than the Danish tax (e.g., because the foreign country has a higher tax rate), the excess foreign tax cannot be credited or carried forward — it is a permanent cost. If the foreign tax is lower than the Danish tax, you pay the difference to Denmark. The credit is claimed using form 22.037 (or the digital equivalent on skat.dk). You must provide documentation of the foreign tax paid (typically a tax assessment notice from the foreign country, withholding tax certificates, or statements from the foreign payer). For dividends and interest, the withholding tax deducted at source is usually documented by the broker or bank.

Limitations and special rules: The credit is limited to the Danish tax attributable to the foreign income — you cannot use foreign tax credits to reduce Danish tax on Danish-source income. The credit is calculated per country — excess credit from one country cannot offset tax due on income from another country (unless the income is of the same type and SKAT allows cross-crediting in limited circumstances). For capital gains and share dividends, special limitations apply — the credit is calculated separately for each income type. If the foreign income is exempt in Denmark under a tax treaty (e.g., certain foreign government salaries, foreign real estate income in some treaties), you do not pay Danish tax on it, and you cannot claim a credit for foreign tax paid (because there is no Danish tax to credit against). Instead, the income is simply excluded from Danish taxation (exemption with progression — meaning it may affect your marginal tax rate on other income). For more on how foreign income interacts with your overall tax position, see our Personal Tax Guide →.

Tax Treaties

Denmark has one of the most extensive tax treaty networks in the world, with over 80 comprehensive double taxation treaties based on the OECD Model Tax Convention. These treaties override domestic law and determine which country has the right to tax specific types of income.

Tie-breaker rules for dual residence: If you are considered a resident of both Denmark and another country under their domestic laws, the treaty's tie-breaker rules determine your single country of residence for treaty purposes. The standard OECD tie-breaker tests, applied in order: permanent home (where do you have a permanent home available?), centre of vital interests (where are your personal and economic relations stronger?), habitual abode (where do you live more often?), and nationality. The outcome determines which country can tax your worldwide income and which country can only tax certain types of income. If you spend significant time in both Denmark and another country, this is a critical analysis to avoid double taxation or double non-taxation. SKAT can provide a binding ruling (bindende svar) on your residence status under the treaty. For more on residence rules, see our Moving to Denmark Tax Guide →.

Permanent establishment thresholds: For business profits, a foreign company is only taxable in Denmark if it has a permanent establishment (PE) in Denmark. The treaty defines PE broadly: a fixed place of business (office, factory, workshop), a construction site lasting more than 12 months (or other threshold depending on the treaty), or a dependent agent with authority to conclude contracts. If the PE threshold is not met, the foreign company's profits are only taxable in its residence country. For individuals providing cross-border services, the 183-day rule often applies — if you work in Denmark for fewer than 183 days in a 12-month period, and your salary is paid by a foreign employer (without a Danish PE), and the salary is not borne by a Danish PE, the income may be taxable only in your home country.

Reduced withholding tax rates: Tax treaties typically reduce the withholding tax rates on cross-border payments, overriding the standard Danish rates. For dividends, the standard Danish withholding tax is 27%, but treaties may reduce this to 15%, 10%, 5%, or 0% (e.g., under the EU Parent-Subsidiary Directive for qualifying EU parent companies). For interest, the standard rate may be reduced to 0% under most treaties. For royalties, the standard rate of 22% may be reduced to 0–15% under treaties or the EU Interest & Royalty Directive. To claim the reduced rate, the recipient must provide a certificate of residence (attestation of tax residence) from their home tax authority. For more on dividend withholding, see our Company Dividend Tax Guide →. For royalty-specific WHT, EU Directive exemptions, and mandatory reporting rules, see our IP and royalty tax guide →.

Reporting Foreign Bank Accounts and Assets

Danish residents must report their foreign bank accounts and certain foreign assets to SKAT if the total value exceeds certain thresholds. The reporting is part of the overall tax compliance framework and is separate from the automatic exchange of information regimes.

Reporting threshold and requirements: If the aggregate value of your foreign bank accounts, investments, and other financial assets exceeds approximately 100,000 DKK, you must report them to SKAT through the self-declaration forms (selvangivelse af udenlandske aktiver) available on skat.dk. The forms require: the name and address of the foreign financial institution, the account number or identifier, the type of account (savings, investment, deposit), and the maximum balance during the year. The reporting is due together with your annual tax return (årsopgørelse). Failure to report can result in penalties of up to 10,000 DKK or more for deliberate non-disclosure. The threshold applies per person — if you are married, each spouse reports separately, and the threshold is per person, not per couple. The reporting obligation applies to accounts held directly or indirectly (through trusts, foundations, or nominees).

Automatic exchange of information — CRS and FATCA: The Common Reporting Standard (CRS) is the OECD framework for the automatic exchange of financial account information between countries. Over 100 countries participate, including all EU/EEA countries, major financial centres (Switzerland, Singapore, Hong Kong), and many others. Under CRS, foreign banks automatically report account information (balance, interest, dividends, proceeds from sales) to their local tax authority, which then exchanges it with SKAT. The information is pre-filled on your årsopgørelse. For the United States, the exchange is governed by FATCA (Foreign Account Tax Compliance Act) — US financial institutions must report accounts held by Danish residents to the US IRS, which then exchanges with Denmark. Always check the pre-filled information against your own records and correct any errors. Denmark also participates in the DAC6 directive on cross-border tax arrangements — professional intermediaries must report certain cross-border arrangements that have tax avoidance indicators (hallmarks). For more on avoiding reporting issues, see our Tax Assessment Notice Guide →.

Foreign Pensions

Receiving a foreign pension while living in Denmark raises specific tax issues. The tax treatment depends on the type of pension (government, private, employment-based), the country it comes from, and the applicable tax treaty.

Taxation of foreign pensions: Under Danish domestic law, foreign pensions received by Danish residents are taxable in Denmark. However, most tax treaties allocate the taxing rights based on the type of pension. For government pensions (state pensions from foreign countries), many treaties allocate exclusive taxing rights to the source country (the country paying the pension), meaning Denmark cannot tax them (exemption method). For private pensions (employer pension schemes, personal pension plans, annuities), most treaties give Denmark the right to tax the pension, but the source country may also have limited taxing rights (typically the pension is only taxable in the country of residence — Denmark). For social security pensions, treaties generally allocate exclusive taxing rights to the paying country. For UK pensions since Brexit, the Denmark-UK tax treaty (based on the OECD model) applies — UK private pensions are taxable in Denmark (residence country), though transitional rules may apply for pre-Brexit arrangements. For US 401(k) and IRA distributions, the Denmark-US treaty generally allocates taxing rights to the country of residence (Denmark), but the US may also tax the distribution if the contribution was deducted from US taxable income (subject to the treaty's savings clause — professional advice is essential).

Deduction for foreign pension contributions: If you receive a foreign pension from an EU/EEA pension scheme, you may qualify for a deduction in Denmark if the pension scheme is approved by SKAT as comparable to a Danish approved pension scheme. The deduction is available for contributions you make to the foreign scheme after becoming a Danish resident. For non-EU/EEA schemes, approval is more limited — you should apply for a binding ruling from SKAT on deductibility. Lump-sum pension payouts (commutation of pension) may be taxed differently from periodic payments — check the applicable treaty and SKAT guidance. For a comprehensive overview of pension taxation, see our Pension Tax Guide →.

Exchange of Information

Denmark is at the forefront of international tax information exchange. Several frameworks ensure that SKAT receives detailed information about your foreign financial affairs, reducing the scope for non-disclosure.

CRS (Common Reporting Standard): The OECD's CRS framework requires financial institutions in participating countries to report account information of non-resident account holders to their local tax authority, which then automatically exchanges it with the account holder's country of residence. Information reported includes: account holder name, address, tax residence (country and TIN/CPR number), account number, account balance or value at year-end, and gross income (interest, dividends, and proceeds from sales). More than 100 countries participate, including all financial centres. Non-participating countries face pressure to join, and accounts in non-participating countries may be subject to additional scrutiny by SKAT. The information is automatically matched against your årsopgørelse — if discrepancies are found, SKAT may open an audit.

DAC6 and Eurofisc: DAC6 is the EU directive on mandatory disclosure of cross-border tax arrangements. Intermediaries (tax advisors, lawyers, accountants, banks) and taxpayers must report cross-border arrangements that contain specified hallmarks (indicators of potential tax avoidance). Reported arrangements are automatically exchanged between EU member states through a central database. Danish residents involved in cross-border tax planning (e.g., trusts, offshore structures, hybrid entity arrangements, preferential regimes) should be aware that their arrangements may be reportable under DAC6. Eurofisc is the EU network for multilateral tax information exchange and joint audits — it coordinates between EU tax authorities on high-risk cross-border tax issues. For more on preventing tax issues, see our Tax Assessment Notice Guide →.

FAQs

Do I have to pay Danish tax on my foreign income?

Yes — Danish residents are worldwide taxpayers and must report all foreign income (salary, pension, dividends, rental income, capital gains) to SKAT. However, double taxation treaties may allocate taxing rights to the source country, and the foreign tax credit mechanism ensures you do not pay Danish tax on income that has already been taxed abroad (up to the Danish tax rate on that income).

How do I claim the foreign tax credit in Denmark?

Use form 22.037 (or the digital equivalent on skat.dk) to claim the credit for foreign tax paid. The credit is calculated per country and per income type — it equals the lower of the Danish tax on the foreign income and the foreign tax actually paid. Excess foreign tax cannot be carried forward. Documentation of foreign tax paid (tax assessments, withholding certificates) is required.

Do I report foreign bank accounts to SKAT?

Yes — if the aggregate value of your foreign accounts and assets exceeds approximately 100,000 DKK, you must report them via SKAT's self-declaration forms. In addition, your foreign accounts are automatically reported to SKAT under CRS (over 100 countries participate) and FATCA (for US accounts). Always verify that the pre-filled information on your årsopgørelse matches your own records.

How are foreign pensions taxed in Denmark?

Foreign pensions received by Danish residents are generally taxable in Denmark, but the treatment depends on the type of pension and the tax treaty. Government pensions are often taxable only in the source country (exempt in Denmark). Private pensions are typically taxable in Denmark. EU/EEA pension schemes may be approved by SKAT, allowing deduction for contributions. UK pensions and US 401(k)/IRA distributions have specific treaty rules — professional advice is recommended.

What are the CRS, FATCA, and DAC6 reporting regimes?

CRS (Common Reporting Standard) requires foreign banks to automatically report your account information to your country of residence. FATCA is a similar US-specific regime for US accounts. DAC6 requires intermediaries and taxpayers to report cross-border tax arrangements with certain hallmarks. These regimes mean that SKAT already receives significant information about your foreign financial affairs — full disclosure is essential to avoid penalties.