Double Taxation Denmark-Spain: Complete Guide 2025
If you're a Danish citizen living in Spain or considering relocating there, double taxation is a topic you simply cannot avoid. Since Denmark terminated its double taxation agreement with Spain in 2008 (effective 2009), the tax situation has become significantly more complex for Danes with ties to both countries.
This comprehensive guide covers all aspects of double taxation between Denmark and Spain, including the difference between the "old regime" and "new regime," how relief rules work in practice, and how to ensure you don't pay more tax than necessary.
What Happened to the Double Taxation Treaty?
To understand the current situation, we need to look back briefly at history. Until 2009, Denmark and Spain had a double taxation agreement that regulated which country had the right to tax different types of income for people with connections to both countries.
Why Denmark Terminated the Agreement
In 2008, Denmark decided to terminate the agreement. The main reason was that many Danish pensioners were moving to Spain, where they could enjoy lower taxation on their Danish pensions. Spanish tax rates were significantly lower than Danish rates at the time, and pensioners experienced considerable tax savings by establishing tax residency in Spain.
The Danish state was thus losing tax revenue from pensions that Danes had earned through a lifetime of work in Denmark. This was unacceptable to Danish authorities, and termination became reality.
Consequences for Danes in Spain
The termination had—and continues to have—far-reaching consequences:
| Group | Impact | |-------|--------| | Existing pensioners | Transitional arrangement ("old regime") protecting those already established | | Future relocators | Stricter rules under "new regime" - Denmark retains taxation rights | | Everyone | Must deal with both countries' national tax laws and EU relief rules |
"Old Regime" vs. "New Regime" - Which Applies to You?
The crucial dividing line for Danish pensioners in Spain is November 2007. Depending on when you established yourself in Spain, you're covered by either the old or new regime, with significant implications for your tax situation.
Who Is Covered by the Old Regime?
You're covered by the old regime if ALL of the following conditions are met:
- ✅ You were resident in Spain by November 28, 2007
- ✅ You received pension from Denmark in January 2008
- ✅ You have maintained your residence in Spain since
These criteria are cumulative—all three must be fulfilled. It's not enough to have lived in Spain in 2007 if you only started receiving pension after January 2008.
Required Documentation
If you claim to be covered by the old regime, you must be able to document this to both Danish and Spanish authorities:
| Document | Purpose | |----------|---------| | Padrón certificate | Municipal registration dated before Nov 28, 2007 | | Residencia certificate | Issued before this date | | Pension payments | From January 2008 (bank statements or tax return) | | Lease or deed | For your Spanish property dated before Nov 2007 |
⚠️ Important: Keep these documents safe—you may be asked to present them year after year.
Tax Benefits Under Old Regime
Under the old regime, your Danish pension is taxed exclusively in Spain. Denmark has no taxation right, and therefore no withholding tax is applied.
Advantages:
- Only one country to deal with for tax purposes (Spain)
- Possibility of lower total taxation, especially for moderate pensions
- Spanish thresholds may mean low or no tax
- No Danish withholding tax on pension
💡 For smaller pensions: If your annual pension is under approximately €22,000, you'll often experience lower taxation in Spain than in Denmark. The Spanish tax system has relatively high personal allowances and thresholds.
Who Is Covered by the New Regime?
You're covered by the new regime if:
- You moved to Spain after November 28, 2007, OR
- You did not receive pension in January 2008, even if you lived in Spain
Under the new regime, Danish legislation applies to the taxation of your Danish pension, even though you're tax resident in Spain.
How You're Taxed Under New Regime
In Denmark:
- Danish pension taxed according to Danish rules
- Withholding tax deducted from pension payments
- Tax rate follows normal Danish pension taxation rules
In Spain:
- You must also declare your Danish pension in Spain
- Danish pension included in calculation of your Spanish tax
- You're entitled to relief (credit) for Danish tax paid
The Double Filing Obligation
This is where it gets complex. Under the new regime, you must:
| Country | Deadline | Requirements | |---------|----------|--------------| | Denmark | May 1 | Report all Danish income, pay tax, receive assessment | | Spain | June 30 | Report ALL worldwide income, calculate Spanish tax, claim relief for Danish tax |
⚠️ Critical: Even if you pay tax in Denmark, this does NOT exempt you from reporting income in Spain. Many Danes mistakenly believe they only need to deal with one country.
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How to Avoid Double Taxation in Practice
Without a bilateral double taxation agreement between Denmark and Spain, you must use national relief rules and EU law to avoid double taxation.
Relief in Spain (Credit Method)
Spain uses the credit method when you, as a Spanish taxpayer, have paid tax abroad:
- Calculate your Spanish tax on your entire worldwide income (including Danish pension)
- Document the Danish tax paid with your Danish tax assessment
- Receive a deduction in your Spanish tax equal to the Danish tax, but maximum the Spanish tax on the same income
Practical Example of Credit Method
| Item | Amount | |------|--------| | Danish pension | €33,500 (250,000 DKK) | | Danish tax (30%) | €10,050 | | Total Spanish tax calculated | €8,000 | | Credit received in Spain | €8,000 (capped at Spanish tax) | | Spanish tax payable | €0 | | Total tax paid | €10,050 |
In this case, you get credit for €8,000 in Spain (not the full €10,050, since your Spanish tax was only €8,000).
Documentation Required
To obtain relief in Spain, you must document:
- Danish tax assessment (must be officially translated to Spanish)
- Specification of pension income and tax paid
- Proof of payment of Danish tax
- Tax residency certificate (if requested)
Which Income Is Taxed Where?
To navigate double taxation, it's essential to understand the main principles for where different types of income are taxed.
Main Rules Without Double Taxation Treaty
| Income Type | Primary Taxation Right | Secondary Right | |-------------|----------------------|-----------------| | State pension & ATP | Denmark (new regime) / Spain (old regime) | Both countries (relief required) | | Private pension | Denmark (new regime) / Spain (old regime) | Both countries (relief required) | | Civil servant pension | Always Denmark | Spain (with relief) | | Salary from Danish employer | Denmark (if work in DK) / Spain (if work in ES) | Country of residence | | Dividends from Danish companies | Denmark (27% withholding) | Spain (with relief) | | Capital gains on Danish property | Denmark | Spain (with relief) | | Rental of Danish property | Denmark | Spain (with relief) | | Capital gains on Spanish property | Spain | Denmark (if relevant) |
Special Rules for Civil Servant Pensions
Civil servant pensions constitute a special category as they're considered remuneration for previous public service:
- Denmark ALWAYS has taxation rights to civil servant pensions
- This applies regardless of whether you're under old or new regime
- Spain must provide relief for Danish tax
- Includes pensions from state, regional, and municipal employment
Filing Obligations in Both Countries
One of the biggest surprises for many Danes in Spain is discovering they must file tax returns in both countries.
Tax Filing in Denmark
Who must file:
- Everyone with Danish income (pension, rental, dividends, etc.)
- Even if you're no longer registered in the population registry
Deadline: May 1 (for the previous income year)
Process:
- Digital filing via TastSelv on skat.dk
- Requires NemID/MitID
- Pre-filled with known information
- You must add/correct foreign matters
Tax Filing in Spain
Who must file:
- All tax residents in Spain
- When worldwide income exceeds approximately €22,000
- When owning foreign property worth over €50,000
Deadline: June 30 (for the previous income year)
What must be reported:
- ALL worldwide income (including Danish)
- Danish pensions (even if taxed in DK)
- Capital income from worldwide sources
- Foreign assets (if over €50,000)
Consequences of Non-Filing
| Country | Consequences | |---------|--------------| | Denmark | Fines of DKK 1,000-5,000, estimated assessment, possible investigation | | Spain | Fines from 50% to 150% of evaded tax, interest, possible criminal prosecution for amounts over €120,000 |
Practical Examples
Example 1: Pensioner Under Old Regime
Person: Jens, 72 years old, resident in Marbella since 2005
| Income | Amount | |--------|--------| | State pension | €24,000/year | | ATP | €3,350/year | | Total pension | €27,350/year |
Taxation:
- Denmark: No taxation (old regime)
- Spain: Taxation of €27,350
Spanish tax calculation (Andalusia):
- Personal allowance: ~€5,550
- Taxable amount: €21,800
- Tax (progressive): ~€2,500
- Effective tax rate: approximately 9%
Jens's benefit: Had he lived in Denmark, his tax rate would have been around 30-35%, so he saves significantly under the old regime.
Example 2: Relocator Under New Regime
Person: Anne, 68 years old, moved to Spain in 2015
| Income | Amount | |--------|--------| | State pension | €26,700/year | | Private annuity | €13,350/year | | Rental income (Danish apartment) | €6,700/year | | Total income | €46,750/year |
Taxation in Denmark:
- Pension tax: ~€14,000 (35%)
- Rental tax: ~€2,700 (40%)
- Total Danish tax: ~€16,700
Taxation in Spain:
- Spanish tax calculated: ~€9,000
- Credit for Danish tax: €9,000
- Spanish additional tax: €0
Anne pays total: €16,700 in tax (~36% of total income). She doesn't pay double, but has significantly more administration with tax returns in two countries.
Example 3: Remote Worker with Danish Employer
Person: Peter, 45 years old, moved to Valencia in 2022
| Income | Amount | |--------|--------| | Salary (Danish employer, work performed in Spain) | €80,000/year | | Danish stock dividends | €4,000/year |
Taxation:
- Salary: Primary taxation right is Spain (work performed there)
- Spanish tax on salary: ~€20,000 (25%)
- Dividends: Denmark withholds 27% (~€1,080), Spain taxes with credit
- Total tax: ~€21,380 (~25.5% of total income)
Peter must file in both Denmark (due to dividends) and Spain (due to tax residency there).
When Should You Seek Professional Help?
Double taxation between Denmark and Spain is complex. You should seek help if:
-
Multiple income sources in both countries
- Combination of salary, pension, capital income
- Rental properties in both DK and ES
- Business income
-
Major decisions ahead
- Considering moving to Spain as pensioner
- Selling significant property or business
- Significant inheritance or gifts
-
Received notice from tax authorities
- In Denmark or Spain
- About incorrect or missing reporting
- About tax assessments or fines
-
Uncertain about old regime eligibility
- Borderline cases around cutoff dates
- Missing or unclear documentation
- Periods of residence in both DK and ES
-
Experiencing actual double taxation
- Rejection of relief claims
- Disagreement between Danish and Spanish authorities
Frequently Asked Questions
Can I ever switch from new to old regime?
No, unfortunately not. The old regime is a transitional arrangement for people who met the criteria when the agreement was terminated in 2007-2008. It's not possible to "qualify" for the old regime later, regardless of how long you've lived in Spain.
What if I move back to Denmark after years in Spain?
When you move back to Denmark, you become fully tax liable to Denmark from the moving date. Any Spanish pension you've earned will be taxed in Denmark. Remember to deregister as a taxpayer in Spain when leaving to avoid double tax liability.
Do I have to pay Spanish wealth tax on my Danish assets?
Yes, if you're tax resident in Spain, you must pay Spanish wealth tax (Impuesto sobre el Patrimonio) on your global assets if they exceed the threshold. This varies by region but is typically €700,000-1,000,000 after deduction for main residence. Your Danish home, bank accounts, investments, etc. count.
What if my spouse still lives in Denmark?
This creates a complicated situation where you may potentially be tax resident in different countries. This affects how your joint income and assets are taxed. Professional advice is strongly recommended for such "split residency" situations.
Conclusion
Double taxation between Denmark and Spain is undoubtedly one of the most complex tax areas for Danes with connections to both countries. Since the termination of the double taxation agreement in 2009, thousands of Danes have had to navigate a system with double filing obligations and risk of paying tax in both countries.
Key takeaways:
- Old regime applies only to pensioners established in Spain before Nov 28, 2007 who received pension in Jan 2008
- New regime means Danish taxation of pension, but with relief in Spain to avoid actual double taxation
- You must file in both countries - it's not a choice, but an obligation
- Documentation is crucial - keep all proof of tax paid and residence
- The credit method in Spain ensures you don't pay double, but administration is extensive
If you're uncertain about your tax situation or experiencing actual double taxation, it's important to act quickly. Tax authorities in both countries have limited understanding periods, and delayed reporting can be costly.
Need help with double taxation? Contact me for a no-obligation conversation about your situation.
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