The Danish National Tax Tribunal (Landsskatteretten) has rejected the Danish Tax Agency’s (Skattestyrelsen) restrictive interpretation of the one-month rule under the Danish expert tax scheme (KSL § 48 E–F). The Tribunal upheld Vialto Denmark’s appeal for a client ruling that “overlapping” employment does not automatically disqualify an individual from the expert tax scheme.
In 2023, the Danish Tax Agency had introduced a stricter practice for employees covered by the expert tax scheme when changing jobs.
According to this interpretation, if there was an overlap between two employment relationships – even due to a garden leave (fritstilling) – the employee would lose eligibility under the one-month rule, which would otherwise allow the employee to continue the expert taxation with the new employment provided that the new employment is commenced no later than one month after the end of the previous employment This view caused surprise and uncertainty among employees, employers, and tax professionals in Denmark.
Following multiple appeals, a case represented by Vialto Partners Denmark was selected by the Tax Appeals Agency (Skatteankestyrelsen) as a pilot case. Both the Tax Appeals Agency and the National Tax Tribunal ruled in favor of the taxpayer, rejecting the Danish Tax Agency’s interpretation that overlapping employment should lead to disqualification in connection with job changes.
While this represents a positive development for individuals and employers relying on the expert tax scheme, it remains uncertain whether the Ministry of Taxation will appeal the Tribunal’s decision to the Danish courts. The deadline for appeal is three months from the ruling.
The ruling provides greater clarity for employers and employees using the expert tax scheme. However, until it is clear whether the decision will be appealed, caution is still advised when planning job transitions under the one-month rule
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Per Ørtoft Jensen
Partner
Jane Møller Fenger
Partner
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