The Danish Parliament has passed a bill, which means that as of 1st January 2020 third country individuals (non-EU/EEU) will be denied a tax card if the Danish Tax authorities cannot verify that the individual has legal stay in Denmark (e.g. possess a valid job permit).

The practical consequence of not having a tax card is that the Danish employer will be required to withhold 55 % taxes after withholding Labour Market Contribution (“AM-Bidrag”) of 8 %. The withholding tax is not representative of the final taxes, but a total rate of approx. 62 % is typically of inconvenience for most employees.

As such, the status of the work permit will now have a direct impact on the tax administration.