IT UNIVERSITY OF COPENHAGEN RESEARCHER TAXATION. Taxation for International Researchers Employed at ITU

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1 IT UNIVERSITY OF COPENHAGEN RESEARCHER TAXATION Taxation for International Researchers Employed at ITU

2 A SPECIAL TAX SCHEME FOR RESEARCHERS FROM ABROAD EXCEPTIONS As a means to attract more international researchers and specialists to Denmark an important taxation scheme called researcher taxation has been introduced. The tax rate is currently benchmarked at 26% for 60 months. This is a flat rate without the possibility of tax deductions. You will also pay a mandatory 8% labour market social contribution. The 60 months may be spread over a period. Normal tax rates in Denmark range between around 40% and 55%. It is worth considering normal tax if you have high tax deductions such mortgage etc., or if you are only in Denmark for a short period. The tax center can calculate your tax rate. Previous tax liability during periods under the special tax scheme if tax liability ceased at the same time as your previous employment Limited tax liability on earned income as a guest lecturer etc. At a university or research institute (total duration of no more than 12 months within the last ten years). Full tax liability on earned income as a guest lecturer etc. at a university or research institute (total duration of no more than 12 months within the last ten years and income exclusively from foreign funds). Your employment as a researcher must start no later than one month after your arrival in Denmark. Furthermore, you must not have been liable to Danish tax during the last ten years prior to the beginning of your employment. (Full tax liability or limited tax liability on earned income or commercial income).

3 LOW TAX RATE FOR RESEARCHERS WITH A PHD DEGREE APPLICATION Employed as a researcher Establishing Denmark as an attractive country to work in is the main objective for offering low tax rates to researchers recruited from abroad. You qualify as a researcher if you are employed by the University as a postdoc, assistant professor, associate professor or full professor according to the Job Structure for Academic Staff at Danish Universities (in Danish: Stillingsstrukturen). This requires that you have obtained a PhD degree. You do not qualify for this special scheme if you are employed as a research assistant, PhD Fellow or administrative staff. You can apply by simply informing the Personnel Section your CPR number and your wish to apply for the researcher tax scheme. The Personnel Section will prepare a special form which will be send to you for your signature. After you have returned the special form to the Personnel Section it will be send to the tax authorities who will check your eligibility. The Personnel Section will ensure salary payment is carried out with tax deduction at 26%. The tax authorities will send a letter of conformation to the University to confirm your eligibility. The duration of your employment can range from one month to an open-ended position, and your employment can be either full-time or part-time. Read more about the special tax scheme at: borger vejledninger Tax scheme for foreign researchers and key employees, P nr. 28 (Guide)

4 ORDINARY TAX ACCORDING TO TAX RATE CARD ANNUAL TAX STATEMENT After the expiration of your researcher tax period, or if your have chosen to pay normal tax rates as opposed to researcher tax, you will pay ordinary tax with allowances deducted, in accordance with your tax card. Your tax card will be issued by your local tax center upon your request. The tax center needs to know the level of your monthly salary and your deductibles. It would be helpful to produce your contract of employment or pay slip, as well as documentation of your tax allowable expenses e.g. travelling, trade union contributions or mortgage. The tax card will be issued electronically, which means that the University retrieves your tax rate and deductions from the E-tax system, which is linked to the Wage Pay System. If you forget to apply for a tax card, you will be provisionally taxed at 55%. Read more about the Danish tax system at: Every spring, the tax authority will send you your tax statement (in Danish: Årsopgørelse) for the period containing in the previous calendar year. In this statement, your researcher taxed salary will be pre-printed along with other income, interest and dividends reported to SKAT by your employer, bank etc. You must inform SKAT of any income not pre-printed on your tax statement. You can report changes to the information pre-printed on the tax statement at www. skat.dk. Choose English at the top and then E-tax on the left, or you can send information to SKAT by choose Send an to SKAT on the left instead of E-tax. You can find all information related to your tax in your electronic tax file (in Danish: Skattemappe) at: If you have questions Visit the Personnel Section in the 2D wing or send us an at: personale@itu.dk

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