New double tax treaty between Denmark and France

DENMARK - New double tax treaty between Denmark and France

July 2019

A new double tax treaty, based on an agreement between the French and Danish authorities will come on to force after the previous one was terminated in 2008.

The agreement will benefit Danish companies and individuals in France, particularly Danish pensioners wanting to spend their retirement in France. The agreement states that Danish pension payments to pensioners residing in France will no longer be fully taxed in both countries.

According to the new agreement, in return for the right to tax Danish pension payments received by pensioners residing in France, it has been agreed that Denmark will reduce Danish taxes on pension payments with an amount corresponding to French taxes.

This is a change from the way double tax treaties are usually structured, where the country of residence reduces its taxes to avoid double taxation.

As Danish tax rates are generally higher than French tax rates, the Danish tax minister estimates that a substantial part of the tax revenue from Danish pension payments to pensioners resident in France will be attributed to Denmark.

Transitional rules will apply to pensioners, who had already relocated to France on 28 November 2007 and started receiving pension payments on 31 January 2008.

Anders Kiærskou