Specialty · Life across borders

Cross-border pensions

For anyone with pension savings in more than one country: the newcomer with a foreign scheme, the Dane moving abroad with a Danish pension, and the returning expat with schemes from employers in several countries.

How we can help

We review each scheme, its contribution history and the relevant treaty to clarify taxation during saving and on payment.

Classification under sections 53 A and 53 B
Tax on investment returns
Contribution history and evidence
Taxing rights when moving
Advice before transfers or withdrawals

How is a foreign pension scheme taxed when you live in Denmark?

Once you become fully tax liable in Denmark, your foreign scheme has to be classified within the Danish system. The classification decides whether contributions are deductible, whether the returns are taxed each year, and whether payouts are taxable. It follows Danish criteria, not what the scheme is called in its home country.

For schemes under section 53 A of pensionsbeskatningsloven (the Danish Pension Taxation Act), contributions made after you move to Denmark are not deductible. Payouts are generally tax-free, but only to the extent that the contributions did not attract a deduction or exemption, in Denmark or abroad. The positive return, on the other hand, is taxed every year as capital income, and you have to report it yourself.

A scheme may instead fall under section 53 B if it was set up while you were not fully tax liable in Denmark and the contributions were actually deducted in full abroad. The returns are then not taxed annually, while payouts are fully taxable. If the conditions cannot be documented, the scheme falls back under section 53 A.

Can you keep paying into a pension in another EU country?

If you come from another EU or EEA country (except Liechtenstein), your scheme can be approved under section 15 D for up to 60 months from your move. You can then keep deducting contributions within the limits that apply in the scheme's home country. One of the conditions is that you paid into the scheme for at least one year before becoming tax liable in Denmark.

The application is made on form 07.057 together with a translation of the pension agreement. When the 60 months have passed, the scheme generally moves to section 53 A, and new contributions are no longer deductible.

What happens to your Danish pension when you leave Denmark?

When you move abroad, you become subject to limited tax liability on your Danish pension payouts. Which country ultimately gets to tax them is decided by the double tax treaty between Denmark and your new country of residence. Without a treaty, both countries can tax the same payout.

Some treaties let Denmark keep the right to tax pensions for which a Danish deduction was given. Moving to a low-tax country therefore does not necessarily move the taxation of your pension with you. Where Denmark is not entitled to tax, the exemption has to be applied for and documented; it does not happen automatically.

Once you are no longer tax liable in Denmark, you can generally also be exempted from Danish pension return tax on your Danish schemes. This does not apply if you remain fully tax liable and resident in Denmark under a tax treaty.

Common pitfalls with cross-border pensions

The costly mistakes rarely happen at payout. They happen years earlier, when a scheme is classified incorrectly or the records of contributions are not kept.

The return on a foreign scheme is not reported, because Skattestyrelsen (the Danish Tax Agency) does not receive the information automatically.
A payout from a section 53 A scheme is treated as entirely tax-free, even though some contributions were deducted abroad.
The contribution history from before the move can no longer be obtained when the payout comes many years later.
A scheme is transferred or cashed in before the consequences in both countries are clear.
Negative returns are not carried forward, even though they can be set off against later positive returns from the same scheme.

Frequently asked questions

Do I pay Danish tax on my foreign pension?

If you live in Denmark, payouts from foreign pension schemes are generally taxable in Denmark. How much is taxed depends on the type of scheme and on whether the contributions were deductible. If the tax treaty gives the paying country the right to tax, Denmark grants relief for the double taxation.

Will my foreign pension appear automatically on my Danish tax assessment?

No. The Danish Tax Agency does not normally receive information about foreign pension schemes, so you have to report both payouts and the annual return yourself. This also applies in years with no payout.

Can I deduct contributions to my foreign pension in Denmark?

Generally not, if the scheme is covered by section 53 A or 53 B. If you come from another EU or EEA country, you can apply for approval under section 15 D and deduct contributions for up to 60 months, provided the conditions are met.

Who taxes my Danish pension if I move abroad?

The double tax treaty with your new country of residence decides this. Some treaties give the right to your country of residence, others let Denmark tax pensions for which a Danish deduction was given. Without a treaty, both countries can tax.

Do I pay Danish pension return tax when I live abroad?

You can generally be exempted from Danish pension return tax once you are no longer tax liable in Denmark. The exemption does not apply if you remain fully tax liable and resident in Denmark under a double tax treaty.