Denmark taxes return on savings on pension schemes regardless of whether the funds are deposited in individual accounts with banks and credit institutions or in the case of savings in life insurance companies and pension funds.

The rules are contained in the Act on taxation of return on pension funds (”Pensionsafkastbeskatningsloven”).

The current rules are a result of a comprehensive reform in 2007. The reform implemented a two-tier taxation of pension funds and life insurance companies, which introduced a new type of tax subjects, namely individuals in Denmark or the EU, which have established retirement pensions, etc. in pension funds and life insurance companies.

The law is complicated and give rise to a number of technical uncertainties for banks, pension funds and life insurance companies.

Partner Kjeld Bergenfelt of CORIT Advisory P/S has co-authored a book in the form of a commentary on the topic which will be published by Karnov Group during the spring of 2013. The book examines in detail a number of problem areas that typically cause the users difficulties and will serve as a practical tool for anyone interested in how the returns from pension schemes are taxed.