Being Stationed Abroad

Expatriate service requires thorough preparation – also when it comes to your pension plan. If your Danish employer stations you abroad, your pension plan continues. However, you have to switch to another type of pension plan without tax deduction for the payments in Denmark.

Before you leave

You set up a new pension plan intended for expatriate employees. The new plan is practically identical to your existing plan. The only difference is that the payments are not tax-deductible. Instead, the payouts are tax-free and the return is not subject to Danish pension yield tax. Any return generated on your new plan will be reported as capital income to the Danish tax authorities.

Returning to Denmark

When you return to Denmark, the payments to your non-deductible pension plan will generally cease. Instead, the payments to your regular, deductible PFA pension plan will be resumed.

If you are fully liable to pay tax in Denmark, the current return on your non-deductible pension plan will be subject to capital gains tax, and you will still be exempt from Danish pension yield tax.

Steps to take

If you need advice about expatriate service, please contact us at (+45) 70 12 50 00 – both before you leave and when you return to Denmark.

Advice on tax matters outside Denmark is not covered by PFA’s advisory services.