Transfer the pensions to a foreign pension scheme if an approved scheme has been set up in another EU/EEA country
If you leave Denmark and you have pension scheme set up in another EU/EEA country, we highly advise you to transfer the funds directly there.
You are subject to limited tax liability in Denmark on your pension payments. This means that you have to pay an average tax rate because you do not belong to a specific Danish municipality.
If the annual ATP payment is less than DKK 2,950 (2019), you will receive the amount as a lump sum when you reach the retirement age. In that case, you must pay a charge of 40% instead of tax.
All pension types will be reported automatically to the Danish Tax Agency (Skattestyrelsen). We generate a tax assessment notice on the basis of the information reported.
You can take both your company and personal pensions abroad with you.
You can transfer the pensions to a foreign pension scheme if an approved scheme has been set up in another EU/EEA country. The Danish Tax Agency (Skattestyrelsen) approves the foreign scheme.
If there is a double taxation agreement
If you live abroad and start receiving payments from an annuity pension or pension scheme providing a regular income, whether it is a personal or company scheme, the double taxation agreement between Denmark and the relevant country will determine to which country you must pay tax.
The general rule is that you must pay tax on the payments under annuity pension schemes and pension schemes providing a regular income in your country of residence.
You may, therefore, be tax exempt in Denmark under the double taxation agreement with the country you live in. If you are exempt from taxation of your pension, you must report the portion of your pension that is tax free to us annually. You do this by entering the amount in box 28 on your tax return every year. At the same time, you declare that you still satisfy the conditions and are entitled to the tax exemption. DKkonsult can make the declaration for 199 DKK/annually.
However, Denmark seeks to ensure that the country that has granted tax relief on the contributions to the pension schemes is also the country that has the right to tax the pension payments. Under the double taxation agreement, Denmark may therefore have the right to tax the payments from your pension scheme even though you live abroad.
If there is no double taxation agreement
If there is no double taxation agreement between Denmark and the relevant country, Denmark taxes the payments.
If you terminate a capital pension, old-age insurance scheme, old-age savings scheme or supplementary lump sum pension, you must pay a charge in Denmark on the full amount paid for which you were granted relief/exemption.
Danish double taxation agreements and international agreements
Supplementary taxation of pension contributions
You may be liable to pay supplementary tax on contributions if you move abroad and have had more than 20% of your pay paid into a company pension scheme providing a regular income or an annuity pension scheme during the 5 years (10 years for principal shareholders) immediately prior to moving abroad.
Denmark has terminated its double taxation agreements with Spain and France If you lived in Spain or France before 28 November 2007, you will in most cases still be covered by the terminated double taxation agreement.
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