- Download our Moving to Denmark Guide (PDF)
Managing banking, money and taxes in Denmark is an easy and convenient process. While the country's highly developed financial infrastructure is a definite plus, expats will need to budget carefully, as Denmark has one of the highest tax rates in the world, not to mention a notoriously high cost of living.
As is the case in most developed and modern economies, Denmark has a largely cashless society, where card and mobile payment methods are popular, particularly in urban areas. This has led to an increased vulnerability to credit card fraud in the country, so expats are encouraged to exercise caution when making card payments.
Money in Denmark
The official currency of Denmark is the Danish krone or crown, abbreviated as DKK. The krone is divided into 100 øre.
- Notes: 50 DKK, 100 DKK, 200 DKK, 500 DKK and 1,000 DKK
- Coins: 50 øre and 1 DKK, 2 DKK, 5 DKK, 10 DKK and 20 DKK
Banking in Denmark
Banking in Denmark is sophisticated and efficient. Most banks offer online banking, which makes paying bills and making transfers easy and convenient. The main banks in Denmark are Danske Bank, Nykredit and Nordea.
Opening a bank account
To open a bank account in Denmark, expats must first apply for and obtain a Civil Registration Number (CPR). Expats can easily find their CPR on their yellow health card.
Expats can begin their application process online and present their yellow health card at their nearest banks, but some banks allow residents to fully complete the process online. Additionally, expats must present a valid photo ID via their passport or ID and proof of address in Denmark.
New arrivals will need to open a NemKonto, which is used for salary and government payments such as tax refunds. All residents in Denmark must have a NemKonto.
ATMs and credit cards
ATMs can be found outside all banks in Denmark, as well as in most supermarkets and shopping centres. Expats can use their credit cards to withdraw cash from ATMs.
The Danish also have a card payment system called Dankort, but expats must have a Danish bank account to use this system. It is useful to have Dankort because it is accepted across the country and some small businesses may not accept international credit cards.
Taxes in Denmark
Expats who are tax residents of Denmark are liable to be taxed on both their local and their worldwide income. Anyone permanently living in Denmark is automatically considered a tax resident. Those who are in Denmark for six consecutive months are also considered tax residents.
Income tax is automatically deducted from an expat’s salary. Tax rates range from 12 to 52 percent. During the first year of an expat's tax residency in Denmark, their income with be adjusted to represent a full year of earning an income to enable them to graduate into the Danish tax system. As expat tax matters can be fairly complex, new arrivals to Denmark should seek advice from qualified tax practitioners with experience handling expat tax matters.
►For useful information about the working world in Denmark, see Working in Denmark
Photo credit: ATM keypad stock image by Eduardo Soares from Unsplash.
Are you an expat living in Denmark?
Expat Arrivals is looking for locals to contribute to this guide, and answer forum questions from others planning their move to Denmark. Please contact us if you'd like to contribute.
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