Personal taxation 8.1 Tax releif of foreign experts 8. Personal taxation Individual income tax in levied on a current year basis by the State and by the local authorities. For most individuals the fiscal year is the calendar year. The State income tax is progressive. Local income taxes are levied at flat rates, which vary according to municipality.
Personal income comprises salaries, wages, pension, income from independent business activities etc.
Capital income comprises interest income and charges, certain dividends from foreign companies, certain allowances and deductions, and other capital income or losses. The tax rate on net capital income is the same as for personal income. Dividends from foreign companies are taxed in the same manner as from Danish companies, if the taxation levied on the foreign company is equivalent to Danish taxation. Otherwise dividends from foreign companies are capital income. By the end of the 36 months period an existing contract can be extended with a maximum of 48 months.