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You Live in Denmark and Have Pensions or Wealth Abroad
When you are fully taxable to Denmark and you receive pensions from abroad, these pensions must be stated on your Danish tax return. Pensions from abroad are not automatically reported to Denmark.
Pensions are divided into 3 types:
- Social pension, eg public pension, early retirement, or ATP (which stands for Arbejdsmarkedets tilægspension, which is the Danish labour market supplementary pension scheme).
- Private pension plan, eg pension earned from an employment relationship, or paid privately to a bank pension plan or insurance company authorized to provide pension plans.
- Public pension, eg when you have been employed by the public sector, including an official pension.
The taxation of foreign pensions depends on the mutual agreements that Denmark has concluded with other countries. There are both double taxation agreements and international agreements. These agreements explicitly address which country has the right to tax and how each type of pension is taxed.
Foreign persons are taxed differently depending on the pension scheme / life insurance you have taken out abroad.
If you have assets abroad, the value of the assets must be reported to the tax authorities each year. These assets may include:
- Bank accounts abroad
- Property abroad
- Market value of listed securities in foreign custodians
- Fair value of unlisted shares abroad
If you own a property abroad, you must pay property value tax in accordance with the Danish rules, but you will receive a discount for foreign tax paid to the on the property.
The property must be registered on your tax return on the same terms as Danish properties. If you have rental income, these must also be included in the tax return.
Foreign properties, where the foreign property valuation is not approved by the Danish Tax Agency, must use the property's purchase price as a basis for calculating the property value tax. The acquisition price is converted (indexed) to the equivalent of the acquisition price in one of the following years:
- 2001 with the addition of 5 per cent.
- October of the current year of income
The lowest value of these three years is chosen as the basis for calculating the property value tax. This calculation is also called an EVS calculation.
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