The 183 days rule for those living in Denmark

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Denmark is one of the Scandinavian countries offering the best opportunities for ambitious and motivated internationals. Considering the field of work, education, research and development, as well as social support, Denmark stands out. Actually, a highly qualified individual who really wishes to come over to Denmark can always be on the lookout for the positive list which lists relevant job openings. The degree of human welfare provision is top notch. 

Such factors have continued to make Denmark be among the top most preferred countries by many people seeking permanent residence. The high thirst for the quality human welfare provisions has pushed many people into seeking to permanently stay in Denmark. While Denmark remains to be an eyecatcher for many, moving here is never just a matter of getting on a plane. 

The whole process towards your first time visiting your final settling is a big deal of numerous procedures. This is attributed to the fact that obtaining a permanent residence permit or visa is a very complex process. Your residence status is a clear and definite definition of your tax residency status. Thus the 183-day rule.

The 183-Day Rule in Denmark

Most states, the Scandinavian not excluded, use the 183-day rule to determine if a person should become a resident for tax purposes. However, an individual’s personal tax residency is one of the major cores in flag theory. The ultimate choice is highly personal since you have to consider various factors.

The concepts of residence and domicile perfectly explain the concept of the 183-day rule. One has to manoeuvre through their residence for the purpose of paying tax. The 183-day rule is used in determining whether individuals who are neither permanent residents nor Danish citizens can be considered residents for taxation.

183 days marks the majority of the number of days in a year. Denmark uses the 183 number of days threshold to widely consider whether to tax someone as a resident. Generally, if you spent 183 days or more in Denmark in a given year, you automatically become a tax resident for the same year.

Denmark has its own criteria for considering an individual a tax resident. If you arrive in Denmark, you will not be subjected to full tax liability immediately. But after a period that exceeds 3 consecutive months or 180 days within any 12-month period you automatically become fully liable to tax.   

Let’s Understand the Term Tax Residence

When you legally reside in a country where you are obliged to pay personal income tax, then it is your tax residence. Most people have their home country as their tax residence. That is the country in which they were born, live and work. This is what is commonly known as domicile.

So long as the work and living factors of the residence don’t change then it means your tax residence will not change. But in most cases, nothing is considered permanent and so are taxes and residence. Generally, the time that you spend in a country is the major determinant of your tax residency.

When you are a resident in Denmark, you are likely to be unsure on which taxes are levied on you. So, it may take some time for you to internalise on your tax obligations in Denmark. When you already spend about 180 days or more in Denmark consecutively for a particular year, then it automatically becomes your tax residence.

A Tax Resident of Denmark

You are generally considered a Danish tax resident if your permanent residency is in Denmark. Also, if you usually reside in Denmark for at least 183-days for a particular calendar year either intermittently or continuously. Here it is very clear that the only decided factor is to as whether you have stayed in Denmark for 183 days.

The suggested 183-days rule implies that you will become a resident in Denmark for tax purposes. The only relevant and possible circumstance of significance is the availability of a home in Denmark. It is also irrelevant whether you are available in Denmark either for work or vacation purposes. 

More Insight into the 183-Day Rule in Denmark

The 183-day rule in Denmark is the ruler and the simplest guidelines in the determination of your tax residency. The general notion is that, “if a person spends more than half of the year in Denmark, then they automatically become a tax resident”. 

While there are numerous factors to determine your tax residency faster, staying in Denmark for more than 6-months is a definite one. However, there are some modified versions of a residency test. But the 183-day rule remains to be the most definite cut-off points to achieving a tax resident status.

Terms and Conditions to Reach 183-Days Rule 

To pass this test, you the candidate must:

  • Have been present in Denmark for at least 31 days in the current year 
  • Been present in Denmark for 183 days during the 3-year period. This is the current year and the two years that immediately precede it.

But all these days are counted as:

  • All the days you were present in Denmark in the current year
  • One third of the days you were present during the previous year
  • One sixth of the days you were present in the previous two years