International employees often prefer a non-deductible pension plan (a Section 53 A plan) due to the tax-free payout and the opportunity to have the savings paid out as a lump sum.
Here you can see the advantages and disadvantages of choosing a pension plan with or without tax deduction:
Establishment of a non-deductible pension plan - Section 53 A
The establishment of a non-deductible pension plan takes place in two steps:
- Registration via the PFA Administrator Portal, collective agreement codes (OK code) or registration form/Pension Broker.
- Submission of a declaration of tax residency.
You must register the employee in the month when the plan should become effective. When we have received the registration, we will send a declaration which the employee must use to disclose his/her tax residency.
Denmark is part of an international collaboration on the exchange of information about tax residency and must report information about this to the Danish Tax Agency. This means that the employees must fill in a declaration on their tax residency in other countries than Denmark if they want a plan without tax deduction.
The declaration must be printed, scanned and uploaded here or sent to PFA, Sundkrogsgade 4, 2100 Copenhagen, Denmark.
The declaration must be submitted no later than 6 months after you have received it from PFA. When PFA has received the declaration, the plan will be established from the date on which the plan is registered via the Administrator Portal, collective agreement codes, registration form or Pension Broker. If the declaration is not submitted on time, PFA will establish a pension plan with tax deductibility.
The process for establishing a plan without tax deductibility
Here, you can get a quick overview of how to establish a plan with tax deductibility and change it to a plan without tax deductibility when returning home from abroad:
Select the relevant process overview based on the registration form that you use.