HomeDanish PoliticsDenmark and Sweden to Revise Øresund Agreement for Commuters

Denmark and Sweden to Revise Øresund Agreement for Commuters

In a new initiative to make life easier for commuters crossing the Øresund strait daily, Minister of Taxation Jeppe Bruus (Social Democrats) signed a letter of intent in Sweden on Monday to revise the current Øresund Agreement. This agreement, which has not been updated since 2003, is set to undergo a significant overhaul to simplify the tax rules for both employees and students commuting between Denmark and Sweden. According to a press release from the Ministry of Taxation, the goal of the new Øresund Agreement is to create a more integrated labor market, which will benefit both individual commuters and employers by making the rules easier to navigate.

“An integrated labor market across the Øresund is undoubtedly beneficial for both Denmark and Sweden. However, simpler rules that both commuters and employers can easily navigate are needed,” said Jeppe Bruus. One of the four key changes being worked on concerns the taxation of home office work for public sector commuters. Currently, public sector commuters living in Sweden but working in Denmark are taxed differently from their colleagues living in Denmark due to different deduction rules in the two countries. The new agreement aims to harmonize the taxation so that public sector employees are taxed in the same way as private sector commuters.

In addition, students receiving SU (Danish student financial aid) are set to experience changes in their tax rules. The new agreement will harmonize and equalize the rules so that Denmark can tax recipients of Danish SU, regardless of whether they live in Denmark or Sweden. This move is a response to the current differences in the taxation of Danish and Swedish student benefits. The new Øresund Agreement will also address tax rules related to Danish pension schemes for commuters. With these changes, it is hoped that some of the barriers and complications that currently make it difficult to work across the Øresund will be removed.

According to the Ministry of Taxation, around 17,000 people commute from Sweden to Denmark and approximately 1,400 in the opposite direction each year. The new Øresund Agreement is expected to come into force in 2025, which will mark a new era for thousands of daily commuters.

Read the danish version here

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