Aarhus March 19th Tax scheme for foreign researchers

Transcription

1 Aarhus March 19th 2015 Tax scheme for foreign researchers

2 Headlines Presentation of the special tax scheme for foreign researchers (and key employees) Introduction: Why, how and who? Conditions to get under the tax scheme at arrival Leave Retrospective What is most beneficial? Taxation after the scheme Where to find more information Side marts 2015

3 Why? Incentive to bring foreigners with special abilities to Denmark. People who would not have come otherwise. Hopefully it will bring more jobs to Denmark on a long term basis. NOT an automatic benefit for foreign researchers. The scheme applies to all sectors and to both Danes and foreigners. Side marts 2015

4 How? Which taxation Special tax scheme with low flat rate tax Of the salary from the employer Until 5 years (60 months) during a lifetime Side marts 2015

5 How? - Taxation under the scheme Taxation Gross income is taxed with a flat rate tax of 26 % 8% labour market contribution + 26% tax (31,92% net) No deductions * Deficits can not be carried forward Non-commercial deficits for example interest expense on property can not be carried forward to next year or to your spouse. Your spouse can also not carry forward your non-commercial deficits * mandatory payments for social security abroad Side marts 2015

6 How? - Taxation under the scheme * mandatory payments for social security abroad No deductions at all? Only one exception which is quite uncommon: Deduction for mandatory payments for social security abroad, for fully tax liable persons, resident in Denmark/ from EU or where Denmark has a special agreement Side marts 2015

7 How? - Taxation under the scheme Income taxed or not taxed under the scheme Income approved for taxation under the special tax scheme is; salary, car, phone, health care from the employer All other income is taxed according to ordinary tax rules Employee benefits/ pay with goods (free food and accommodation, news papers, clothing, etc.) Income from other sources (income from other employments not approved under the special tax scheme, interest income, dividend on shares etc.) Side marts 2015

8 Who? Key employees with a high income. At least kr. plus ATP per month. (Not today s main subject). or Researchers employed at a University (or a research institution). Researchers employed elsewhere. To be approved under the scheme as a researcher it is necessary to: - have a Ph.D. or similar - have a job, where research is the main topic Side marts 2015

9 Who? Approval Researchers employed at the University Universities can approve whether the person has researcher-level. Employment must be as scientific staff, as Post Doc, assistant professor eg. which can only be employed with researchers. Other researchers Qualifications and job-content have to be approved by the Researchers Council at the commencement of the job. Side marts 2015

10 Conditions to get under the scheme at arrival Not liable of tax to Denmark within the latest 10 years in certain ways Tax liability to Denmark must start at commencement of the employment 1 month rule at entering Employment with a Danish company or institution or a Danish branch of a foreign company Side marts 2015

11 Conditions to get under the scheme at arrival The 10 year rule No tax liability to Denmark within the last 10 years before employment Neither full tax liability (liable of global income) - by residence, or by staying for more than 6 months nor limited tax liability (tax on Danish sources) - on earned income or commercial income, or what replaces that kind of income, like Danish pension, state education grant (SU), Ph.D. funding etc.) Side marts 2015

12 Conditions to get under the scheme at arrival 10 year rule Periods under the special tax-scheme are not taken into account Changing jobs -1 month rule Okay, not to terminate tax liability if it takes up to1 month between working in two different (researcher) jobs If more than 1 month between two jobs To be able to come back on the scheme, terminate tax liability leave Denmark Side marts 2015

13 Conditions to get under the scheme at arrival 10 year rule exception Teachers at summer schools etc.: Paid by the University or research institute only as limited liable to tax (total duration of no more than 12 month within the latest 10 years) and guest researchers funded from abroad Solely funded from foreign funds - OK if fully liable to tax (residence) (total duration of no more than 12 month within the latest 10 years) Side marts 2015

14 Leave Maternity or Paternity Leave will be judged as employment - applies for both periods with salary and periods with public funding - the period on leave is using of the total amount of months under the scheme - possible to get back on the scheme Leave without salary will be considered as a period without employment - must give up tax liability, to be able to get back on the scheme Side marts 2015

15 Retrospective Deadlines Application for the special tax scheme can be retrospective for up to 3 tax years (for 2014 no later than 1 May 2018) For tax years where the special tax scheme have been chosen it is also from 2011 possible to get out of the scheme with retrospective effect (for 2011 no later than 1 May 2015) Side marts 2015

16 What is most beneficial? We are NOT allowed to guide you (Rough) Guidance can be found by using this site: skat.dk Search for; Beregn din skat (Calculate your tax) The site is only in Danish, so you might need help from a Dane Side marts 2015

17 Taxation after the scheme Used up the full period? Transfer to ordinary tax rules Make sure you get a new tax card (electronical) Access skat.dk TastSelv menu with NemId Choose Forskudsopgørelse Or Call , tax questions in general Side marts 2015

18 Where to find more information Guide: P nr. 28 (GB) Tax scheme for foreign researchers and key employees and Application form including information: A - Approved Researcher ONLY questions about the special tax scheme/researcher taxation: Niels Smedegaard Telephone Lene Bernth Fjord Telephone Side marts 2015