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Taxes & General Thoughts for Family Relocation to Copenhagen

Last activity 02 March 2021 by Nellie Berg

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lgmckenney

Hello there. I've been looking through old posts on relocation to Copenhagen, which have been helpful, but I still had some questions as my husband and I consider expatriating for a job offer he's received in Copenhagen.

It is a Danish company and he would be making a rate that would allow for the lower expat effective tax rate. I would remain working remote for my U.S. company from Copenhagen. I can't seem to find how my income would be taxed, as was wondering if anyone has experience with this. We understand we will have more taxes to pay in Copenhagen, but are trying to calculate our total effective tax rate to better see if the move would be financially feasible (for example will my income also be subject to the 32% tax rate in Denmark?)

Alternatively, if anyone has a tax consultant that may be able to address this question, that would be helpful as well.

Suggestions for areas to live - we have a 14 month old daughter so ideally would look for a 3 bedroom home / apartment in a "kid-friendly" neighborhood... parks a plus, and walking / biking to restaurants / grocery stores / etc.

Wondering if other expats can share their experience with the "relocation" / "expat" package, keeping in mind my husband would be working for a Danish company with a local contract (vs. an American company sending him abroad, which we've also done previously and know how nice those benefits can be). Just trying to get a feel for what is "standard" practice for this type of expatriation.

And of course, also open to other general comments and suggestions... your personal experience and the pros and cons of your move, things you found challenging, things you wished you would have considered (financially or otherwise) before you moved, etc...

Thank you all and I look forward to hearing from you!

Nellie Berg

Hi,

Tax questions of that kind are for experts, I therefore suggest to you that you contact Skat. I link to some of Skat's pages which may make you a little wiser on the subject.
https://skat.dk/skat.aspx?oid=2298793https://skat.dk/skat.aspx?oid=2244300https://skat.dk/skat.aspx?oid=2362

I have found some other links which may also help you.
https://www.taxesforexpats.com/denmark/ … nmark.htmlhttps://www2.deloitte.com/content/dam/D … k-2020.pdfhttps://home.kpmg/xx/en/home/insights/2 … e-tax.html

/Nellie

lgmckenney

Hi Nellie,
Thank you for your response. Yes, I think you're right and this is a question for a professional if no one here has already gone through a similar experience.

Thanks for your links, too!

Nellie Berg

I found your question about taxation the most important of your queries, and personally, I wouldn't rely on other expats regarding this. It's too important for guesses, thoughts, beliefs etc. You need the exact and precise answer.

Since your husband has been offered a salary which qualifies for the 32 %'s taxation, I expect that the company will also offer him the necessary advice regarding his and yours taxes. If not, I would negotiate this as a part of a whole expat package.

I would also ask the company for help to find a housing. I cannot recommend this enough.

Regarding where to settle? I would prioritise a flat/house with good public transport to the place of employment. Take a look yourself at Google maps or https://webapp.rejseplanen.dk/webapp/#! … y|H442001. The longest journey may be shorter in time than a shorter one.

I have been told that even if the Danish taxation seemingly are higher than the American one, the final calculation will be about the same (free health insurance, kindergarten fees etc.). I shall not say whether this is correct or not, but look at the overall picture.

Maybe, the Copenhagener municiplaity site can give you an idea of what to do regarding a range of practical issues.
https://international.kk.dk/

/Nellie

lgmckenney

Hi again Nellie,

Yes, he talked with the company who is asking their legal / tax team this item of clarity to help in our decision process.

Regarding the other expat package suggestions - I think it helped we have done this before, but like I said, we were being relocated to France by an American company for a 3 year period (and the package included housing, car, utilities, etc. etc. etc.). I didn't expect the same items, but was wondering what might be expected for a Danish company relocating an American to a Danish contract. So the offer does include tax support and support finding housing, to name a few. Glad to hear these are typical to ask for.

Also agree with your comment on taxation. Initially, we will be paying ~15% more for income taxes. But agree on healthcare. What do you mean by "kindergarten fees"... ? My understanding that we still had to pay for daycare? Our daughter is 14 months. I also found some of these costs on your very helpful website! And it does show daycare is much cheaper than the average childcare in the U.S... though we have a daycare at my husband's office which was similar in cost.

Thanks again for all of your help !

Nellie Berg

Do notice that I wrote kindergarten fees, not free kindergartens. Actually, until your kid turns three, it will even be a creche which is more expensive than a kindergarten. However, I was just trying to say that all kind of expenses should be included to get an overall picture.

Taxes in Denmark may be high, but expats have told me that their available amount is roughly the same in this country as in other countries. where they have lived when they include everything.

/Nellie

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