When does tax liability begin upon immigration?

The case law in this area is neither precise nor consistent. It requires a specific assessment in which various factors must be considered. For example, many taxpayers reside abroad but serve as board members in Danish companies. These individuals travel to Denmark multiple times per year to attend board meetings or similar.

As a general rule, a taxpayer does not become fully tax liable by participating in board meetings in Denmark. However, this conclusion may change if, for instance, the person stays in their summer house while engaging in such business activities.

The Danish Tax Agency has accepted that a taxpayer may sporadically and to a limited extent use their phone and/or email for business purposes while having a residence in Denmark, without becoming fully tax liable. It is important to emphasize, however, that the taxpayer will become fully tax liable if they conduct business meetings (e.g., a board meeting) in their summer house.

Furthermore, the Danish Tax Agency places particular importance on the fact that the taxpayer does not become fully tax liable if they stay at a hotel in connection with board meetings and do not overnight in their summer house. This creates a clear distinction between “vacation or similar” and “business activities.”

If the Danish Tax Agency determines that the taxpayer has become fully tax liable without having properly reported this, it may result in an extraordinary tax assessment, by which the tax authorities can go back up to 10 years. In addition, the taxpayer may face fines or imprisonment for tax evasion, depending on the circumstances and the extent of the violation.

Read more about the tax consequences of emigration here (danish)