When moving from Denmark, you retain the right to have a pension paid out from ATP when you retire. ATP will write you when you approach retirement age. Therefore, you must remember to contact ATP if you leave Denmark and if you subsequently change your address abroad.
Information about premature withdrawal of savings from a pension scheme
If you have personally made contributions to a pension scheme – or if the university has done so – during the years you have lived and worked in Denmark, the taxation to which you are subject is determined by the tax scheme under which you worked.
A non-allowable scheme
If you worked under the 26 percent tax scheme and set up a non-allowable pension scheme, either through your employer or privately, the savings in such a scheme are not taxable, as you have already paid 26 percent tax on these pension scheme contributions. However, the interest earned through the scheme is taxable.
When leaving Denmark, you are permitted to withdraw these pension savings tax-free. If you leave the savings in Denmark, the internal tax regulations of the new country of residence will determine how these savings are taxed when paid out, including whether interest earned is taxed prior to payouts.
The time between the termination of a pension scheme and the payout can range from one day to several months. This depends on the stocks in which the money was invested, and how quickly they can be sold.
An allowable pension scheme
If you are not subject to the 26 percent tax scheme and have set up a tax-allowable pension scheme, you can choose to withdraw these savings prematurely, ie. prior to turning 60 or prior to the scheduled payout of these savings.
If you withdraw the savings from a pension scheme prematurely, you must pay a 60 percent tax to Denmark for both capital pension schemes and pension schemes payable in instalments, as well as a small administration fee to the pension fund for cancelling your pension prematurely. You must give written notification to your pension fund requesting to have your pension paid out. Such notification must include details of your Danish bank account and documentation that you are citizen of a country abroad.
If a capital pension scheme is paid out as scheduled, ie. upon turning 60, death or disability, you must pay a 40 percent tax. If you choose this scheme, you must remember to notify your pension fund of your current address.
If the pension scheme payable in instalments is paid out as scheduled, taxation depends on whether whether or not the country of residence has established a double taxation agreement with Denmark.
The double taxation agreement determines whether you must pay PAYE tax to Denmark or tax to the country of residence. If your home country has not established a double taxation agreement with Denmark, you are obliged to pay tax to Denmark and perhaps also to your home country. The national laws of your home country determine whether or not you must pay tax there.
You can download publications with information for foreigners about pension conditions etc. at MP Pension.