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The Danish tax system, with its intricate structure and varied deductions, can be particularly perplexing for those unfamiliar with its workings. Navigating the pension landscape, characterized by a comprehensive social security framework, poses another challenge as individuals grapple with understanding and optimizing their contributions. Furthermore, securing the right insurance coverage can be a complex process, given the differences in policies and coverage between Denmark and other countries. Overall, the financial landscape in Denmark demands careful navigation, and newcomers often face a learning curve in comprehending and aligning with the country's tax, pension, insurance, and banking systems. Seeking guidance and resources becomes crucial for a smooth transition into Denmark's financial environment.

Ekspatify offers the following services:

  • Prepare documents, open a bank account, and get NemKonto.

  • Guidance in tax obligations and fill your data in the Danish tax portal.

  • Get home and liability insurance.

  • Guidance in pension plans and tax on investments.

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Pension and Retirement

Understanding the Danish pension system is crucial for both residents and expatriates to plan for a secure and comfortable retirement.

Denmark has a three-tier pension system consisting of the state pension, occupational pensions, and individual or voluntary pensions.

  1. State Pension (Folkepension):

    • The state pension is a universal, means-tested pension provided by the government.

    • Eligibility is based on residency and requires a certain number of years of residence in Denmark.

  2. Occupational Pensions (Arbejdsmarkedspension):

    • Many Danes are covered by occupational pension schemes provided by their employers.

    • These pension plans are typically mandatory for employees and are designed to supplement the state pension.

  3. ATP (Arbejdsmarkedets Tillægspension):

    • ATP is a supplementary pension scheme that covers most employees in Denmark.

    • Contributions to ATP are shared between employers and employees and are intended to provide additional income in retirement.

Tax System

Denmark has a progressive tax system with relatively high tax rates, but in return, citizens benefit from a strong social welfare system and public services. Here are key points about the tax system in Denmark:

  1. Progressive Income Tax:

    • Denmark has a progressive income tax system, where individuals with higher incomes pay a higher percentage of their income in taxes.

    • Tax rates vary across income brackets.

  2. Municipal and State Taxes:

    • Income tax in Denmark is divided into municipal and state taxes.

    • Municipal taxes vary by municipality, and residents pay both municipal and state taxes.

  3. Tax Deductions and Credits:

    • Individuals may be eligible for various deductions and tax credits, such as those for commuting expenses, childcare, and education.

  4. Tax-Free Allowances:

    • There are tax-free allowances for certain income types, and individuals may be eligible for deductions based on personal circumstances.

  5. Tax Year:

    • The tax year in Denmark is the calendar year, running from January 1st to December 31st.

Filling Out Tax Form
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