Special Tax Scheme

Information about the special tax scheme - the 26 percent ruling - in place for experts and researchers resident in Denmark…

The 26 percent tax ruling

Experts or researchers who work in Denmark can choose to pay a flat tax rate of 26 percent. With this scheme, taxpayers forfeit their personal allowance and deductions. However, labour market and pension contributions are still made. This can be done for up to 60 months, which can be spread over several working periods.

To be eligible for this rate of tax, taxpayers have to meet the following criteria:

  1. They must not have been a fully or limited liability taxpayer in Denmark during the ten years prior to taking up this employment. Taxpayers who have previously been employed via the special tax scheme may do so again if their Danish tax liability ceased when their employment did.
  2. A taxpayer's tax liability must start when they begin employment under the special taxation scheme.
  3. A taxpayer must not have been involved directly or indirectly in the management of an enterprise in the five years prior to being employed under the special tax scheme.
  4. If employed by a company the taxpayer must not own or have owned more than 25 percent of the share capital or have or have had more than 50 percent of the voting rights.
  5. Where the employer's enterprise is personally owned the individual must not own or have owned more than 25 percent of the equity capital or have or have had control of the enterprise.
  6. There is a minimum monthly salary. In 2011 this was set at DKK 69,300 before tax, but after deducting labour market and supplementary pension fund contributions.

People who are employed as researchers and have had their qualifications approved can use the special tax scheme. This still applies if the applicant has been subject to taxation as a guest lecturer at a university or other research institution in the preceding ten years, as long as the total duration of tax liability does not exceed 12 months. Those with approved researcher status can still use the scheme even if they are subject to full tax liability by being in Denmark for longer than six months, if they have been employed as a guest lecturer financed exclusively from overseas. This only applies if the period of being fully liable for tax does not exceed 12 months in the previous ten years.

Research work is defined as that "comprising creative work undertaken on a systematic basis in order to increase the stock of knowledge and the use of this stock of knowledge to devise new applications". There is no distinction between research undertaken in public institutions and that in private enterprises.

  • To find out more about the 26 percent tax scheme for foreign researchers and key employees: Click here



Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Denmark which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.