1. International introduction
PhD students in Denmark studying abroad
Spring 2016

2. Programme - topics Tax liability Agreements to avoid double taxation
Deductions/allowances
Grants
Additional information

3. PhD students abroad
This part of the presentation is aimed at PhD students who are enrolled at a Danish university and move abroad to do part of the PhD in an other country
If the PhD student is enrolled at an institution abroad through the entire course of the studies, then the salary is fixed under different premises. In that case you have to contact SKAT.

4. Full or limited tax liability while staying abroad
Full tax liability:
Any person who has residence in Denmark while staying abroad
Danish citizens sent abroad by the Danish State or any local authorities.
Limited tax liability:
• Any person not living in Denmark but having income from Danish sources.
Residence is a room, an apartment or a house (rented or owned)
Danish Citizens – includes spouse and children under the age of 18 (if Danish citizens)

5. What is ”residence in Denmark”?
“Residence in Denmark” is the place where you live, for example a room, an apartment, a house/villa.
“Residence in Denmark” is considered being kept unless:
there has been given notice to quit the residence
it has been sold
it is hired out for at least three years (irrevocable contract).
The condition for deduction for meals/accommodation:
Keeping a residence/home in home country – being able to prove it.
Temporary work/limited employment – unable to sleep in normal home because of distance – reason for = work in DK

6. Full tax liability
The Danish tax system is based on the global income principle. It means that a person’s total income is taxable in Denmark – no matter where the income comes or emerges from.
Full tax liability concerns:
Any resident in Denmark who continues to keep a residence in Denmark while staying abroad – no matter whether he/she is a Danish citizen or not
Any Danish citizen who is appointed by the Danish State, local authorities or public institutions.

7. Limited tax liability
Any person - not living in Denmark - but having income from Danish sources, for instance:
Salary for work carried out in Denmark
Danish state education grant (SU)
Grants for PhD students, travelling expenses, grants for students according to the Danish Act on Universities, grants for foreign students, grants from the Danish research council etc.
Limited tax liability concerns
Any PhD student who receives SU, even though he/she has given up residence in Denmark when moving abroad
Any PhD student who receives taxable grants from the Danish research council, even though he/she has given up residence in Denmark when moving abroad.

8. Agreements to avoid double taxation
When an income is taxable in more than one country, there is a situation of double taxation
Double taxation is normally solved through agreements to avoid double taxation
These are bilateral agreements concluded between two countries in order to avoid double tax on the same income.

9. Agreements to avoid double taxation
Denmark is generally entitled to tax salaries/payments from public institutions – also SU.
The right to tax salary from private companies depends on the duration of the stay abroad, and whether or not the residence in Denmark is maintained while staying abroad:
If the residence in Denmark is not kept, Denmark is not entitled to tax salaries from private companies.
If the residence in Denmark is kept and the country where the studies are carried out is entitled to tax the income, Denmark reduces the Danish tax to be paid.
Register your income from abroad on TastSelv – “Ret årsopgørelsen” as “Udenlandsk indkomst”.

10. Deductions and allowances
You are allowed to earn DKK 44,000 in 2016 (2015: 43,400) before you start paying tax. This is known as your personal allowance “personfradrag”.
Deduction for transport between home and work - if more than 24 km a day – no matter whether you have got any expenses or not
Interest payments - both Danish and foreign
Pension scheme contributions - made by you
Contributions to unemployment fund and trade union membership.
Deduction for food and accommodation expenses during travelling under certain conditions. Max. DKK 26,200 in 2016 (DKK 25,900 in 2015).

11. Deductions and allowances
Transport between home and work
Rates for 2016 (2015)
0 – 24 km
No deduction
25 – 120 km
DKK 1.99 (2.05) pr. km
121 km –
DKK 1.00 (1.03) pr. km

12. Deduction of food and accommodation expenses
You can only deduct expenses for food and accommodation when you are travelling for an employer and
you have an available residence in Denmark while staying abroad. The residence is not considered available if it is hired out or lent out to somebody
you are sent abroad by your Danish employer
the stay abroad is temporary
the distance between your home in Denmark and your working place abroad is so far that you can not possibly spend the night at your home in Denmark
you pay for food and accommodation expenses yourself.

13. Deduction of food and accommodation expenses
You can deduct maximum DKK 26,200 in 2016 (DKK 25,900 in 2015), either
on the basis of documented actual food and accommodation expenses or
according to the standard rates (they are DKK 477 (471) pr. day for food (limited to 12 months at the same place) and DKK 205 (202) pr. day for accommodation.
The deduction will be reduced by
any tax-free allowances covering food and accommodation
any tax-free study travelling grants covering food and accommodation.

14. Deductions and allowances
Travelling expenses
In accordance to year 2016 rates you may deduct the following if sent out by your employer:
You may deduct up to a maximum of DKK 26,200 in 2016 (DKK 25,900 in 2015)
The deduction for food is only allowed for the first 12 months
You have to meet certain conditions to get the deductions.
2016 (2015)
Food
DKK 477 (471) per day – (24 hours)
Accommodation
DKK 205 (202) per day – (24 hours)

15. Deductions and allowances
Tax and pension schemes
You can take your foreign pension scheme with you to Denmark and get a tax deduction.
For more information, you need to contact SKAT, who must approve your pension scheme.
You must submit form no EN for SKAT’s approval.
Not all foreign pension schemes – should be approved by SKAT

16. Deductions and allowances - calculation
Your monthly salary after deduction of pension contributions DKK 33,971 Labour market contributions at 8% DKK -2,718 Salary after deduction of labour market contributions DKK 31,253 Deductions as stated on your tax card DKK -8,232 Salary to be taxed at the rate of 39% DKK 23,021 Tax deducted (A-skat) at the rate of 39% DKK -8,978 You will receive DKK 22,275

17. Grants – in general All grants are subject to tax in Denmark
Grants from the education institution for travelling, insurance, food and accommodation – no matter whether covered by bill or not
Grants from a/your company for travelling, insurance, food and accommodation – no matter whether covered by bill or not SU
Foundation grants – except those mentioned in ligningsloven § 7K
under the condition that the grant is claused exclusively for studying abroad
under the condition that the study actually takes place abroad.

18. Foundation grants (section 7K of ligningsloven)
Foundation grants are exempted from tax if the grant is given under the condition that it is used for studying abroad, and if it is actually used for covering expenses while studying abroad.
These kinds of expenses are “used for studying abroad”
Documented travelling expenses between Denmark and the country where you are studying. If you use your own car or motorbike for travelling, you may use the deduction for transport between home and work (slide 11)
Usual expenses for food and accommodation and minor necessities at the place of study. Calculated either on the basis of documented actual expenses or calculated by standard rates (slide 14)
Payment for classes, participation fees, etc. including courses in the language of the country where you are studying
Books.

19. Foundation grants (section 7K of ligningsloven)
These grants can be used for:
Flight ticket departure and return
Transport to and from the place of study
Travel insurance for you
Visa for you
These grants can not be used for e.g.:
Local transport
Buying a car
Private health insurance
Leisure activities.

20. Foundation grants (section 7K of ligningsloven)
Important:
Only the PhD students’ expenses are covered by the tax exemption – not the part which covers expenses for spouse and children
The scholar will be liable to tax on the part of the grant that exceeds the above mentioned expenses.

21. PhD students from foreign countries
There might be special rules according to • Tax exemptions for scholars from developing countries • Special conditions according to double taxation agreements.

22. Guides for more information
If you need additional information please look for the leaflets
Tax in Denmark An introduction to the Danish tax system for non-Danish speakers. Find it at: skat.dk (English)  Individuals  Guides  (P.nr. 37).
Skatten – ved arbejde i udlandet (Danish leaflet) Contains information about allowances, tax exemptions and tax deductions. Find it at: skat.dk  Vejledninger  Vejledninger til borgere  Skatten – ved arbejde i udlandet (P.nr. 24)
skat.dk/english

23. Thank you for your attention!
Questions?
Thank you for your attention!