The corona pandemic has caused restrictions on where people can stay and perform their work. For commuters crossing the Danish/Swedish border at Øresund, this can have an impact on both tax and social security.
If you live in Denmark and work in Sweden for a Swedish employer
If you live in Denmark and work in Sweden for a Swedish employer, you will typically be taxed on your entire salary in Sweden. This follows from the so-called Øresund agreement on tax matters between Denmark and Sweden.
However, it is a condition that your work in Sweden amounts to at least half the working time in any 3-month period.
The work in Denmark must also be carried out at home at one's own residence or holiday home etc., or work in Denmark or in a third country must constitute a business trip or other work of an occasional nature. This may include courses, conferences, trade shows or the like.
If you have an increased number of home working days in Denmark due to the corona pandemic, it may mean that you no longer will be taxed in Sweden on the entire salary from your Swedish employer.
This may entail that the salary for your workdays at home during periods where the Øresund agreement does not apply must be taxed in Denmark.
The result may be an increase in total taxation, if you are taxed in Sweden under the so-called SINK scheme, which is a flat tax of 25 pct. without deductions, combined with tax exemption in Denmark on the Swedish salary (applicable because you are covered by Swedish social security).
In relation to the rules on social security, your changed work pattern does not change your coverage by Swedish social security.
Consequently, you will still be entitled to tax exemption in Denmark on the Swedish salary for work performed in Sweden, but the part of the salary that relates to work in Denmark must be taxed in Denmark according to the general Danish tax rules, where the marginal tax rate is approx. 56 pct.
When calculating working hours, holidays and sick days must be counted as working days in Sweden.
Weekends, bank holidays as well as lieu days, are not included in the calculation of the number of working days.
Social security if you normally work in several countries
If you normally work in several EU/EEA countries and have an A1 certificate from the Danish social security authority as proof that you are covered by Danish social security, the influence of the corona pandemic on your work pattern does not change in which country you are covered by social security.
Consequently, no action is required. Your A1 certificate will remain valid for the period.
Social security if you are posted
If you have an A1 certificate as proof that you are covered by social security in Denmark during temporary posting to work in another EU/EEA country, the influence of the corona pandemic on your work pattern does not change in which country you are covered by social security if your posting period is interrupted for up to 2 months, as long as the completion of the assignment abroad is not postponed.
If the termination of the work assignment is postponed and the interruption period is longer than two months, an extension of the A1 certificate should generally be sought.
The above article is taken from tax:watch, our electronic English newsletter on Danish Tax and VAT matters. tax:watch is issued on the last Friday of each month and is free of charge. Please sign up here.