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Join our webinar on the New changes to the Øresund Agreement

From January 1, 2025, a new Øresund Agreement between Denmark and Sweden has come into effect, bringing significant changes to the taxation rules for cross-border workers.

Join our webinar to see real life examples from both a Danish and a Swedish point of view.

This updated agreement aims to simplify tax regulations, reduce administrative burdens, and accommodate the increasing prevalence of remote work.

Simplified Taxation Rules

Taxation Based on Employer Location

One of the key changes is that cross-border workers will primarily be taxed in the country where their employer is based, regardless of whether the work is carried out in that country or remotely from their home country. This means that if you live in Sweden but work for a Danish company, you will be taxed in Denmark, provided you work there for at least 50% of your working days over a 12-month period.

Public-Sector Employees Included

The new agreement also extends to public-sector employees, allowing them to work from home without facing double taxation. This aligns their tax treatment with that of private-sector employees.

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Flexibility for Remote Workers

Work from Any Location

Under the new rules, cross-border workers can perform their duties from any location within their home country, such as co-working spaces or cafés, and still qualify for tax exemptions. This flexibility is designed to accommodate the modern work environment

Extended Calculation Period

The period for determining where work is primarily performed has been extended from three months to twelve months. This change offers greater flexibility and ensures that workers are not penalised for short-term changes in their work location.

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Additional Changes and Benefits

Pension and Student Grants

The new Øresund Agreement introduces other rule changes as well. For instance, individuals living in Sweden with pension savings in Denmark will now have to pay a 15.3% tax on their pension yield. Additionally, Danish student grants (SU) received by Swedish residents will be taxed in Denmark, while Swedish student grants received by Danish residents will no longer be taxed in Denmark.

Conclusion

The updated Øresund Agreement represents a significant step towards modernising and simplifying the tax system for cross-border workers between Denmark and Sweden. By reducing administrative burdens and accommodating remote work, the agreement aims to enhance the already thriving labour market across the Øresund strait. Would you like to learn more about these changes? Join our upcoming webinar to get detailed insights and ensure compliance with the new rules! Our resident tax experts Jacob Krushave and André Ahrenkiel will, together with Rebecka Belge from IUS Tax Sweden, guide you and answer all your questions.

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