Sunday, August 26, 2007

Denmark clamps down on foreign workers avoiding tax...honest

A lot of publicity at the moment is being given in the Danish media to this "huge tax loophole" that allows foreign workers to come to Denmark and pay less tax.

This is one of the most hilarious bits of scandal-mongering I've ever seen. Newspapers and top politicians all jumping up in arms about abolishing the foreign worker scheme that allows foreign workers to pay 25% tax on their earnings if they work here for less than 3 years.

What's laughable is that in reality, the rules are so onerous that I have never known anyone ever be able to take advantage of this scheme except probabyl professional footballers (handy for a 3 year contract before the move on to pastures new), or, I would guess, cushy University posts. You have to be getting paid something like over 50,000 krone per month AFTER tax, have the exact job agreed and sponsored before coming here, etc. etc. So you might guess that a Polish worker coming to do a bit of bricklaying for a few months doesn't even qualify from the off.

I will point out thought that I'm glad it's going. I'm not in favour of any tax system that gives favourable incentives to one person over another for doing the exact same job, which is plainly what could happen here.

But the way it's reported in the media makes it sound like every foreigner in Denmark is here on this cushy scheme (and it isn't even really 25% since you have to pay 9% Social security on top!). It simply isn't true but highlights the xenophobic underlying attitude of many Danes, including politicians that they wish to gain political capital on a problem that probably doesn't really exist.

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