Global Daily Tax News, Sweden, Denmark Reviewing Tax For Cross-Border Workers, (Jun 14, 2024)

Sweden and Denmark have completed negotiations on changes to the tax rules that apply to cross-border workers.

The Danish Government said the agreement will make tax compliance simpler for workers, the majority of whom commute from Sweden to Denmark for work.

The rules for public sector employees will be aligned with those for private sector employees. Currently public sector workers pay tax in their country of residence for days worked from home, while the remainder is taxed in the country where work is carried out. Private employees meanwhile are typically taxed only in their country of employment, including on work carried out from home.

Other changes are intended to prevent situations where cross-border commuters are subject to more advantageous tax treatment that domestic workers. Changes will also be implemented to harmonize the two countries' rules on the taxation of pension savings.

The two countries are aiming to have the new rules in place from 2025.