Principal declaration on pension taxation between France and Denmark

Principal declaration on pension taxation between France and Denmark

Negotiations on a new double tax treaty between Denmark and France

The Minister of Taxation provides an update on the ongoing negotiations of a new double tax treaty between Denmark and France. Since 2009 there has been no treaty in force, which was mainly due to the taxation of pensions. Denmark resigned the treaty due to the lack of capability in applying taxation on pensions saved in Denmark (with deductions), which were paid out to individuals, who had relocated to France. A similar situation was present with Spain where the treaty was also resigned.

The principil declaration will provide Denmark with the ability to have taxation right over pensions that are paid out from Denmark and taxed as limited liable income due to the source in Denmark. However, Denmark must account for French taxation and thereby provide relief of resident (French) taxation, which is significantly lower than in Denmark. This will ultimately lead to less tax in Denmark, but a more fair taxation of the individuals.

Furthermore, with a double tax treaty in force, a string of other uncertainties and risks of double taxation, which have been present the last ten years, are likely to disappear as well.

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