When you move to Denmark – perhaps for a new job or a temporary stay – your pension is probably not the first thing you think about. However, it may be something you should pay attention to.
In June 2025, the Danish Tax Council clarified how certain foreign occupational pension schemes must be treated for tax purposes. This clarification may have significant implications for individuals who bring a foreign pension scheme with them when relocating to Denmark.
The new practice means that more foreign pension schemes must now be reported and taxed under Danish rules. In short: Denmark wants to know how your pension has been treated for tax purposes abroad – and the documentation must be in order.
Documentation is key for correct taxation
The binding ruling issued by the Danish Tax Council places greater requirements on individuals relocating to Denmark with a foreign pension scheme. You must be able to document:
- How the pension contributions have been taxed abroad
- Whether you have received tax deductions for those contributions.
The reason is simple: Denmark typically taxes pension payouts if you have received tax relief for the contributions abroad. If no deduction has been available, the investment return may instead become taxable in Denmark.
In short:
- Tax deduction abroad → the return is generally tax-exempt in Denmark
- No tax deduction abroad → the return is generally taxable in Denmark.
When can it become more expensive?
The additional top tax only applies to income exceeding DKK 2,592,000 (DKK 2,818,152 before labour market contributions). Only when income exceeds approximately DKK 2,797,000 after labour market contributions, there will be an actual additional tax compared with the current rules.
Avoid double taxation with the right documentation
If both Denmark and the country where the pension originates tax the payouts, you may obtain relief under the applicable double taxation treaty. However, this requires clear documentation of how both the contributions and the investment return have been taxed abroad.
This now also applies to foreign publicly administered occupational pension schemes if, in practice, they are comparable to ordinary commercial pension arrangements.
Be aware of common pitfalls
Danish rules do not cover all types of foreign pension schemes, which may lead to misunderstandings:
- Lack of documentation: Without proof of how the pension has been taxed abroad, you risk incorrect – and potentially costly – taxation.
- Incorrect classification: Is your scheme a pension or a social security arrangement? If in doubt, it may be advisable to request a binding ruling from the Danish Tax Council.
- Overlooked reporting obligations: If your foreign scheme resembles a Danish pension scheme, it must be reported to the Danish Tax Agency.
Seek advice before the Danish Tax Agency asks questions
If you move to Denmark with a foreign pension scheme – whether private, public or occupational – it is advisable to have it reviewed by a tax adviser.
At Grant Thornton, we assist both individuals and companies with:
- Assessing how foreign pensions should be taxed
- Preparing the necessary documentation
- Ensuring correct reporting to the Danish Tax Agency.
Would you like assistance in understanding how the rules affect you and your pension? Our tax specialists at Grant Thornton are ready to help.