The United States and Denmark have signed a tax treaty for many years, but updated their agreement in 2001. This current treaty sets maximum tax rates that provide for the exchange of information between countries and protect citizens of both countries from double taxation. The United States is one of the few governments to tax the international incomes of its citizens and permanent residents residing abroad. However, there are provisions that protect against possible double taxation. To avoid double taxation of income, Denmark has entered into DTTs with a large number of countries. All tax treaties contain provisions relating to the exchange of tax information and specific EU rules apply. Double taxation can also be linked to inheritance tax. To remedy this situation, Denmark has entered into contracts in this regard with the other Scandinavian countries, Germany, Italy, Switzerland and the United States. Among the countries with which Denmark currently has TTDs and in which the treaty contains a remuneration clause are: the EU/European Economic Area (EEA) or the countries with which Denmark has a social security agreement (as part of the internal service agreement): there is a totalisation agreement between Denmark and the United States. American expatriates working in Denmark must take into account this agreement and the rules it establishes through the country`s system under which they are taxed. One factor is whether the taxpayer works for a Danish company or a U.S. company.
Details of the agreement are available on the U.S. Social Security Administration`s website. Of course, looking for professional tax advice is always a good idea. In its provisions on the elimination of double taxation and tax cooperation, the new treaty includes international standards developed after the implementation of the current treaty more than 50 years ago, said Donald C. Lubick, Assistant Secretary for Tax Policy. A person domiciled in Denmark has the right to deduct from Danish tax on foreign income tax income taxes that are paid on income from foreign sources, within the limit of a maximum amount of Danish tax paid on the share of taxable income which is made up of foreign sources. DTT facilities can be invoked if their provisions are more advantageous. If you are a tax or software provider who calls through an electronic file problem and it is not account-related, please contact the Electronic Help office in Austin, Texas, at 512-416-7750 (no charge). Help is available Monday to Friday from 7 a.m. to .m. until 6 p.m.
.m CST. When someone thinks of Denmark, I think of certain things – happy people, mild temperatures and… High taxes.