Foreign-salary relief requires a choice between § 33 A and treaty rules

Danish residents claiming relief on foreign salary must choose between ligningslovens § 33 A and the applicable double-tax treaty rules for the same income and period.Skat Skattestyrelsen’s revised guidance makes that choice explicit and directs employees of Danish employers seeking exemption from Danish withholding to digital form 01.016, Ansøgning om fritagelse for dansk skattetrækSkat.

The form applies only to income paid from Denmark.Skat The employee, employer or adviser may complete it, and its first page specifies the documentation to attach. The earlier guidance instead requested a copy of the employment or posting contract, together with residence information using form 04.029. The new form reference should therefore inform application preparation; it does not establish that supporting documents are no longer required.

For § 33 A, the statutory starting point is a person fully taxable under kildeskattelovens § 1Retsinformation earning salary from employment during at least six months outside the Danish realmRetsinformationSkatRetsinformation. Interruptions may comprise only necessary work in Denmark directly connected with the foreign stay, holidays or similar stays, totalling at most 42 days.Retsinformation Relief excludes salary attributable to work in Denmark.Retsinformation Daily commuting does not satisfy the foreign-stay requirement.Skat

The guidance now stresses that the foreign stay must relate to the work. SKM2023.519.SKTST explained the distinction: moving abroad independently of the employer, without a connection to the employer’s circumstances, falls outside § 33 A. Each employment must be assessed separately. However, the guidance’s shorthand excluding holidays, internships and studies should not be read as excluding every employer-arranged training assignment: that styresignal expressly describes qualifying graduate postings and permits holidays abroad within an otherwise qualifying stay.

Another new checklist item says the employee must be taxable abroad.Skat Section 33 A’s statutory wording instead specifies full Danish tax liability and the employment and stay conditions; it does not state a general foreign-tax-liability condition. Advisers should distinguish that checklist wording from the statutory test when assessing entitlement.

For qualifying private-sector employees, relief normally removes the Danish tax attributable to the foreign salaryRetsinformation; where a treaty assigns Denmark the taxing right, § 33 A, stk. 3 provides half reliefRetsinformation. Public employees face additional restrictions concerning specified tax-free allowances and collectively agreed pay. Treaty credit and exemption must be assessed under the relevant agreement; § 33 credit is also unavailable for salary already covered by § 33 A.Retsinformation

The revised reporting instructions ask taxpayers to identify the work country, chosen method, foreign tax and available documentation on the forskudsopgørelse. For the årsopgørelse, the instructions say to select Udenlandsk indkomst and answer the questions in rubrik 15 (Udenlandsk lønindkomst). Employees with foreign employers must include benefits such as a company car or housing. Retain contracts, payslips and foreign tax records as supporting documentation. Keep a travel or stay overview to document the 42-day limit.

The guidance also adds a residence summary referring to an irrevocable letting of a Danish home for at least three years, and requests evidence of full foreign tax liability in dual-residence cases. Its removal of the former travel, transport and social-contribution deduction sections does not itself establish that those deductions have been abolished.

The legal basis is ligningsloven §§ 33 and 33 A, kildeskatteloven § 1 and the applicable double-tax treaty, with the employer-connection interpretation explained in SKM2023.519.SKTST.