Specialet 30 november - Aalborg Universitet

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Specialet 30 november - Aalborg Universitet

Aalborg Universitet International skatteret Kathrine Vestergaard

The Danish employee could, if he becomes subject to limited tax liability and performs some of the work at

home in Sweden, continue to be covered by the Danish social security according to the special treaty about

social security. This will be most advantageous, as the Danish contribution is significantly lower than the

Swedish. If the Danish employee works at home in Sweden in this situation, he will reduce travel expenses,

and taxes will be reduces compared to full time work in Denmark. If the Danish employee works less than

half of the time in Denmark in each 3‐month period, he would be governed by Swedish social security,

which will give a lower wage, lower tax and thus a lower disposable income.

If the Danish employee instead takes a job in Sweden for a Swedish employer, he will be taxed in Sweden

according to the DTC art. 15, paragraph 1, and Denmark will have to provide relief for the Danish tax. If the

person works full time in Sweden, he will be covered by the Swedish social security, and Denmark will have

to provide relief for the entire Danish tax on the Swedish wage. The Swedish wage would therefore either

be taxed under the general Swedish tax rules or by the special Swedish SINK‐tax. When working full time in

Sweden for an entire year the Danish employee will get the most appropriate taxation by using the general

rules, because this allows several deductions from the taxable income despite the higher taxes. If the

Danish employee works some of the time at home in Denmark instead, he could continue to be covered by

the Danish social security according to the special treaty about social security. This will be most

advantageous in this situation, as the Danish contribution is significantly lower than the Swedish. The travel

expenses will be reduces, but now the employee has to pay some tax to Denmark. Because of the Danish

social security, Denmark only provide relief for a part of the Danish tax, and the Danish employee will

therefore have to pay more taxes total. Despite of the higher taxes, the Danish employee would have the

most disposable income, when he works more than 25 % of the time in Denmark without applying for the

Swedish social security, because this will give him a higher wage after the total social security contributions

are deducted.

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