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

Please let you employer know that it is very important that we are informed about your expatriate service and your return to Denmark as this affect your tax matters.

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.

We recommend that you seek advice from an accountant on tax matters in connection with expatriate service.