On di.dk we use cookies for multiple purposes relating to functionality, web analyze, and marketing. If you continue, you accept cookies for these purposes. You can read more about cookies and change your cookie settings on this page.

DI: Good news on research tax from Ministry of Business

Danish Minister for Industry, Business and Financial Affairs Brian Mikkelsen intends to extend the coverage period of the low tax rate for highly educated foreigners. The Confederation of Danish Industry supports the initiative.
Many high skilled workers leave Denmark when they have to start paying tax.

Publiceret: 23.08.2017
Af Felix Bekkersgaard Stark mail

It is expected that within the next few weeks, the Danish government will present a comprehensive business plan that will make life easier for companies in Denmark. However, Minister for Industry, Business and Financial Affairs Brian Mikkelsen (Conservatives) has already announced in Danish newspaper Berlingske Tidende that he will expand the so-called ‘research tax scheme’.

Today, the scheme allows highly paid foreigners to work for five years in Denmark under a special tax rate of 26 per cent plus labour market contributions.

According to the proposal from Brian Mikkelsen, the scheme would be expanded so that foreigners would be able to spend seven years under the low tax rate, which will meanwhile be raised by one per cent, making the expansion cost neutral for the government.

“It is a very sensible proposal. Firstly, because companies have a great need for highly skilled labour, and this proposal will make it easier to attract and retain employees. Secondly, because an extension of the scheme will increase the chance of foreigners staying in Denmark even once they are no longer covered by the scheme,” says Deputy Director Kent Damsgaard, the Confederation of Danish Industry.

See also: Spouses of highly educated foreigners to be exempt from language test

Foreigners are disappearing

It is a known problem that many highly skilled foreigners leave Denmark once they have to pay full taxes.

According to a study from DI and DEA from 2016, the average period of residency is just 3.5 years for a foreigner who has come to Denmark under the research tax scheme.

That is one of the reasons why an extension of the scheme was included among the recommendations that DI presented to the government earlier this year.

“Without the scheme, many would not come at all. And this type of employee is absolutely crucial in order for large Danish companies to be at the forefront of global competition. They thereby create jobs for many others and that value far exceeds the tax revenue that would come from taxing them on equal footing with Danes,” says Kent Damsgaard.

He looks forward to the further process, in which DI hopes that several more of its proposals for adjustments can be met.

“For example, as a foreigner, you are excluded from the scheme if you have earned even the slightest amount of taxable income in Denmark within the past 10 years. But it is precisely people like this, who have already experienced Denmark, who are most likely to try out a permanent job here. Moreover, it does not make sense that the scheme prevents foreign entrepreneurs and owner-managers from moving their company to Denmark and taking advantage of the scheme. We need those people as well,” says Kent Damsgaard.

See also: National action plan to secure more skilled it-workers

Without the scheme, many would not come at all. And this type of employee is absolutely crucial in order for large Danish companies to be at the forefront of global competition.
DEPUTY DIRECTOR KENT DAMSGAARD, DI
More info
Kontakt image
Direct: +45 3377 3090
Mobile: +45 2585 3216
E-mail: keddi.dk
Your e-mail address will be used solely for this newsletter subscription. You can unsubscribe at any time here.
PUBLISHED: 8/23/2017 LAST MODIFIED: 8/23/2017