If you're intending to stay for some time, you can defer taxes by investing in a Pension. Skandiabank's self select pension scheme impressed me because it has no annual charges
other than those of the funds you choose to invest
in. Some of the fees on investment funds at High
St. banks horrified me, so if you are financially savvy,
as a lot of IT Contractors are, you'll find this a much
better deal.
To be
honest, the rules for contributing pensions are not that attractive. There are two pension types, and the taxation rules are explained as I understand them.
KapitalPension
Allows you to contribute approx 40,000 krone yearly with a 40% tax break, but you will be charged 40% on the fund value at maturity, as well as 15% tax on the profit!
RatePension
This gives you a tax break at your highest tax rate, but you will also be charged 15% tax on the profit. This pension has more possibilities though, because you then pay income tax on the monthly payout to yourself.
Thus, a common thing for Danes to do is retire to places like Spain so they only pay the 5% national tax rate and avoid the state and kommune taxes since they do not live anywhere in Denmark. The Danish government is trying to clamp down on those retirees who claim to live abroad but still retain a house in Denmark. The possible solution? Tax all retirees living abroad but who retain a holiday home in Denmark as if they were Danish residents...have they forgotten they still squeeze 25% MOMs out of these people whenever they come back?
The obvious solution therefore for
people like you or I without strong ties
to Denmark is to sell up everything prior to retirement
and never come back.