Under Article 4 (Residence) and its tie‑breaker rules, you look at permanent home, center of vital interests, habitual abode, and nationality to determine a single treaty residence. If the tie‑breaker deems you a resident of Denmark, you may claim certain treaty benefits as a Danish resident. However, the “saving clause” in U.S. treaties generally lets the U.S. still tax its citizens and residents as if the treaty didn’t exist, with limited exceptions. Practically, that means you’ll usually file a U.S. Form 1040 reporting worldwide income, then use the Foreign Tax Credit (Form 1116) and, if eligible, the Foreign Earned Income Exclusion (Form 2555) to relieve double tax. When a treaty provision changes the source of an item to foreign (for example, certain investment income), you can use the “certain income re‑sourced by treaty” category on Form 1116 to free up additional credit room. Keep documentation supporting your residency analysis and any treaty positions.

Reference: IRS Publication 901

The saving clause is the reason many U.S. citizens feel treaties “don’t work.” It says the U.S. can tax its citizens and residents as if the treaty didn’t exist. But there are important exceptions where the treaty still helps U.S. citizens, such as relief for government service income, certain student/trainee benefits, teachers/researchers (if provided), and pension/social security articles depending on treaty wording. Also, even when the saving clause applies, the treaty can allow “re‑sourcing” of certain U.S.‑source income to foreign source, which can increase your Foreign Tax Credit capacity. In practice, the treaty is still valuable for clarifying residency tie‑breakers, preventing double withholding on U.S.‑source passive income via forms like W‑8BEN, and coordinating taxing rights so you can plan. Think of the treaty as a map of primary taxing rights; the saving clause means the U.S. keeps its citizen‑taxing rights, but the treaty still provides tools and exceptions you can use.

Reference: IRS Publication 901

This “dual‑resident taxpayer” path shows up frequently. If you meet residency under both countries’ domestic rules but the treaty’s tie‑breaker treats you as a Danish resident, you may claim benefits as a resident of Denmark. For U.S. purposes, if you rely on that position, you generally must file as a nonresident (Form 1040‑NR) for the part of the year you’re treated as nonresident and disclose the treaty position on Form 8833. This is technical and has trade‑offs (e.g., loss of certain U.S. resident deductions/credits). Many people instead remain U.S. residents for filing (Form 1040) and use Foreign Tax Credit and, if eligible, FEIE. If you do adopt the treaty‑resident claim, be meticulous about the Form 8833 disclosure and the specific article you rely on, and ensure it actually produces a better outcome after considering the saving clause and any exceptions that do—or don’t—apply to citizens.

Reference: IRS Tax Treaties

If you take a position on your return that reduces U.S. tax based on the treaty—for example, claiming treaty residency, exempting an item, or applying a reduced rate—you may need to disclose it on Form 8833. The requirement is driven by IRC §6114 and the Form 8833 instructions. There are exceptions where 8833 isn’t required (e.g., certain reduced withholding on FDAP income claimed on W‑8 forms), but dual‑resident claims and most exemptions are disclosable. Failing to file Form 8833 when required can trigger penalties. Your disclosure should name the treaty (U.S.–Denmark), the article and paragraph, the Internal Revenue Code section overridden, and describe the nature and amount of the reduction. Keep in mind that U.S. citizens claiming benefits as residents of Denmark often run into the saving clause, so be sure the article you’re citing is one of the exceptions or the position is otherwise valid.

Reference: Form 8833

In Denmark, marginal tax rates are typically higher than in the U.S., so many find the Foreign Tax Credit (FTC) more favorable than the Foreign Earned Income Exclusion (FEIE). FTC lets you credit Danish income taxes against your U.S. tax on foreign‑source income, often reducing U.S. residual tax to zero while preserving eligibility for credits tied to earned income. FEIE excludes earned income but can limit access to credits and can complicate FTC carryovers. A blended strategy—using FEIE up to the exclusion limit and FTC on the rest—can work, but coordination rules apply and you generally can’t claim FTC on income you exclude. Model both paths using your actual Danish taxes and U.S. categories. If you exclude, file Form 2555; if you credit, file Form 1116 (and possibly multiple 1116s by category). The “right” choice depends on your income mix (wages, RSUs, interest/dividends), housing costs, and long‑term carryover planning.

Reference: IRS Publication 54

A common frustration is hitting the FTC limitation because U.S. dividends and interest are U.S.‑source under domestic rules, but Denmark also taxes them. Many treaties—including U.S.–Denmark—allow certain income to be treated as foreign‑source to the extent necessary to avoid double taxation. On your U.S. return, you put those items on a separate Form 1116 under the “Certain income re‑sourced by treaty” category and apply the limitation specifically to that bucket. This can unlock additional credit capacity that would otherwise be blocked by sourcing rules. It doesn’t automatically eliminate tax; you still compute the limitation and follow the detailed instructions, including loss adjustments and separate baskets if needed. Keep your treaty citations clear in your workpapers in case the IRS asks how you determined resourcing and the applicable percentage.

Reference: Form 1116 Instructions

The FTC is available for foreign income taxes that are compulsory and based on net income, including taxes “in lieu of” an income tax in some circumstances. In Denmark, municipal tax is a significant part of total income tax. For U.S. FTC purposes, qualifying municipal income taxes can be creditable, subject to the usual limitations and reduction rules (e.g., if the foreign tax is refunded, subsidized, or relates to excluded income). Make sure you’re not attempting to credit non‑income taxes (like VAT) because those are not creditable. Keep records of assessments and payments that break out national and municipal components so your Form 1116 reflects the correct totals, and watch for timing mismatches that could trigger redeterminations and adjustments to carryovers.

Reference: IRS Publication 514

Source of earned income is generally where the services are performed. If you’re physically in Denmark while working, your wage income is foreign‑source for FTC purposes—even if paid by a U.S. company in U.S. dollars to a U.S. bank. That matters because only foreign‑source income can absorb the Foreign Tax Credit in the general category. If Denmark taxes your wages (it will if you’re resident), you’ll typically claim FTC against U.S. tax on that foreign‑source wage income. This is separate from whether your employer has Danish payroll obligations; that’s a local law issue. For the U.S. return, keep travel logs in case you perform services in multiple countries during the year and need to allocate.

Reference: IRS Publication 54

Equity compensation is allocated by workdays between grant and vest. Denmark may tax the portion allocable to Danish workdays; the U.S. taxes you as a citizen on the full amount. For U.S. FTC, you source the wage‑type income where you performed services (days in Denmark vs. U.S.). You’ll often end up with part foreign‑source (eligible for FTC) and part U.S.‑source (not eligible), so carefully track grant‑to‑vest calendars and travel. If Denmark taxes the whole benefit, you may rely on treaty re‑sourcing for the U.S.‑source slice only if the treaty assigns taxing rights that allow re‑sourcing for that item; otherwise, you may face residual U.S. tax. Detailed documentation and proper Form W‑2/1042‑S reporting matter.

Reference: IRS Publication 54

Non‑U.S. persons claim treaty rates with Form W‑8BEN; individuals complete line 10 to identify the treaty country and article for the income type. If you’re a U.S. citizen or resident, you are not a “foreign beneficial owner” and cannot use W‑8BEN. If you are a dual‑resident claiming treaty residence in Denmark under the tie‑breaker and filing as a nonresident with Form 1040‑NR, W‑8BEN may be appropriate. Otherwise, U.S. brokers will typically require Form W‑9 and withhold according to U.S. rules. If Denmark also taxes your U.S. dividends/interest, you may rely on treaty re‑sourcing and claim FTC to mitigate double tax. Always align what you hand to your broker with what you file on your return and, when relying on treaty residency, disclose via Form 8833.

Reference: Form W-8BEN

Most U.S. treaties—including U.S.–Denmark—assign primary taxing rights on gains from movable property (like publicly traded shares) to your country of residence, with exceptions for real property, permanent establishments, or days‑present rules for certain personal services. Practically, if you’re a Danish resident, Denmark will generally tax your share gains; the U.S. typically does not impose withholding on capital gains for nonresidents (but citizens remain fully taxable). If you’re a U.S. citizen living in Denmark, the saving clause means the U.S. still taxes your gains; you then use FTC to credit Danish tax to the extent allowed. Keep records of basis, holding periods, and any Danish tax paid to support FTC computations and carryovers.

Reference: U.S.-Denmark Tax Treaty

Income from real property is typically taxed where the property is located. The U.S. will tax your U.S. rental net income, and Denmark will tax you as a resident on worldwide income. For the U.S. return, you report rental income and expenses on Schedule E. To avoid double tax, you usually claim FTC for Danish tax on that same rental income only if it’s U.S.‑source—however, because it’s U.S. source under domestic rules, you cannot credit Danish tax against U.S. tax in the general category. Instead, treaty re‑sourcing may let you treat some U.S.‑source items as foreign source to the extent needed to relieve double tax, but real property often remains sourced to the U.S. Model out whether the FTC applies (for example, Danish tax might be creditable against Danish tax only). Keep depreciation records consistent across both systems.

Reference: Form 1116 Instructions

Most non‑U.S. mutual funds and ETFs are PFICs under U.S. law. The PFIC regime (Form 8621) is domestic anti‑deferral law and generally isn’t overridden by treaties. That means U.S. shareholders in Danish funds may have punitive taxation (excess distribution regime) unless they make QEF or mark‑to‑market elections, each with its own compliance burden. The treaty doesn’t eliminate PFIC reporting or tax. Carefully evaluate whether a fund is a PFIC before buying. If you already own one, work with a preparer familiar with PFIC reporting to decide whether to purge, elect, or continue under default rules, and ensure Form 8621 is filed when required.

Reference: Form 8621 Instructions

Cross‑border pension coordination is complex. The U.S.–Denmark treaty and its protocol include provisions on “pension funds” and, in some cases, relief for contributions or taxation of dividends to pension funds. Whether your individual contributions are deductible in the U.S., or whether plan accruals are deferred from U.S. tax, depends on plan type and treaty language. Many foreign employer plans are treated as nonqualified from a U.S. perspective, with contributions included in income and growth taxed currently under general rules unless an article provides relief. Always match your fact pattern to the treaty and technical explanation before assuming U.S. deferral. If no specific relief applies, you still report as required on your U.S. return and then rely on FTC for Danish taxes paid on distributions later.

Reference: Denmark Treaty Technical Explanation

In many treaties, pension and annuity articles assign primary taxing rights to the residence state (with exceptions). If Denmark taxes the payout, the U.S. may still tax you as a citizen under the saving clause, unless the article is an explicit exception. Practically, U.S. citizens often report foreign pension distributions as ordinary income, then claim FTC for Danish tax, subject to limitations. The technical explanation clarifies how the article applies and any caps or carve‑outs (for example, public pensions or social security‑type benefits may be treated differently). Keep the Danish tax forms and withholding statements, compute taxable amounts in USD, and evaluate whether any portion is return of basis under U.S. rules.

Reference: Denmark Treaty Technical Explanation

Withholding at source is governed by U.S. domestic rules and the treaty. Some treaties reduce or reassign taxing rights on private pensions/annuities; however, the saving clause often means U.S. citizens don’t get those reductions. If you’re not a U.S. citizen and are a resident of Denmark under the treaty, you may be able to claim reduced U.S. withholding by providing appropriate documentation. U.S. citizens typically report the distribution on Form 1040 and claim FTC for Danish tax if Denmark also taxes it. Review the pensions article and technical explanation for your exact status before asking your plan custodian to change withholding.

Reference: U.S.-Denmark Tax Treaty

Social Security benefits are governed by both domestic rules and the treaty’s pension/social security provisions. The treaty text and technical explanation clarify who gets primary taxing rights. If the U.S. taxes your Social Security under domestic rules, the saving clause may still apply for citizens. Denmark may also tax the benefit depending on its law; you may then use FTC to mitigate double tax. Always check the treaty article’s specific language and exceptions, and keep annual SSA‑1099 and Danish tax statements for your files.

Reference: U.S.-Denmark Tax Treaty

Form 8938 is an IRS form attached to your U.S. return when your specified foreign financial assets exceed thresholds; FBAR is filed with FinCEN. Check the IRS page for Form 8938 thresholds and definitions (accounts, certain pensions, and interests in foreign entities can count). Thresholds are higher for bona fide residents abroad. Even if a foreign asset is already reported elsewhere (like on Form 8621), you may still need to report it on Form 8938. Penalties for non‑filing are steep, so inventory your Danish accounts, brokerage, and pensions and compare to the applicable thresholds for your filing status and residence.

Reference: Form 8938

FATCA is a U.S. law that requires reporting of specified foreign financial assets on Form 8938 when thresholds are met. Your Danish financial institution’s FATCA due diligence doesn’t change your filing duty, but it’s a signal you likely have reportable assets. Inventory accounts, certain pensions, and interests in foreign entities. Compare total values to the Form 8938 thresholds that apply to you as a taxpayer living abroad. File Form 8938 with your U.S. return if required; this is separate from any information returns for PFICs (Form 8621) or entity interests. Keep year‑end and maximum‑value records in USD.

Reference: Form 8938 Instructions

Yes. U.S. citizens and resident aliens must file U.S. returns based on worldwide income, regardless of where they live. Denmark may also tax you as a resident, but you use FEIE and/or FTC to mitigate double tax. Filing thresholds and due dates are similar, with an automatic 2‑month extension to June 15 if you’re abroad (interest still accrues). You may also have information returns (e.g., Form 8938) in addition to income tax forms. The treaty doesn’t wipe out your basic obligation; it coordinates taxing rights and provides tools to reduce double taxation. Keep track of both countries’ deadlines to avoid penalties.

Reference: U.S. Citizens and Resident Aliens Abroad

Student/trainee articles can exempt certain scholarship or limited compensation from tax in the host country for a defined period, and they’re among the provisions that sometimes escape the saving clause for U.S. citizens. To use them, you must meet the article’s conditions (purpose of visit, duration limits, and source of funds). For U.S. filing, scholarships may be tax‑free or taxable depending on use (tuition vs. living), but treaty relief could change the host‑country outcome. If you claim a treaty exemption on U.S. wages or U.S. withholding, you typically use Form 8233 (for independent personal services) or W‑8BEN/W‑4 treaty claims as applicable; if the position affects your U.S. return, disclose on Form 8833 when required. Always cite the exact article and keep enrollment/funding documentation.

Reference: IRS Publication 901

Many treaties have an article that exempts employment income in the host state if you’re present fewer than a set number of days and other conditions are met (e.g., pay not borne by a local employer or PE). If Denmark does not tax under that article, your U.S. return still includes the wages, but you might not have Danish tax to credit. Be careful: days‑present tests are strict, and employer‑borne‑cost tests can trip you up. If you assert the treaty exemption to a payer, you may need to disclose on Form 8833. Keep a precise day count and employer documentation.

Reference: IRS Publication 901

Many treaties include an article that specifically addresses entertainers and athletes, often allowing the host country to tax performance income regardless of the general personal services article. If you’re a U.S. citizen, the U.S. still taxes you; if Denmark taxes you under that article, you’ll look to FTC to mitigate double tax. Track gross receipts and deductible expenses by venue and date, and keep Danish withholding certificates for your 1116. If you plan ahead, you may be able to structure payments to align with treaty thresholds or exceptions where available.

Reference: U.S.-Denmark Tax Treaty

Income tax treaties generally don’t cover Social Security taxes; those are governed by separate totalization agreements. From a U.S. income tax standpoint, your SE income is foreign‑source to the extent the services are performed in Denmark. You report it on Schedule C and may claim FTC for Danish income taxes. Whether you owe U.S. SE tax (Social Security/Medicare) depends on the totalization rules between the U.S. and Denmark; the IRS’s expat guide notes that separate social security agreements may exempt you from U.S. SE tax when foreign coverage applies. Coordinate documentation of your coverage status to support any exemption on Schedule SE.

Reference: IRS Publication 54

Green card holders are U.S. residents for tax purposes unless they claim a treaty nonresident position under the tie‑breaker. If you do, you’re generally treated as having expatriated for certain tax purposes and must file as a nonresident (1040‑NR) and attach Form 8833. This can have immigration and long‑term tax consequences (including potential impact under IRC §877A for long‑term residents who “expatriate”). Consider the broader implications before taking this step and get tailored advice.

Reference: Form 8833

You elect FEIE by filing Form 2555 with a timely (or amended timely) return. Once you choose the exclusion, it remains in effect for that year and future years unless you revoke it. If you revoke, you generally can’t re‑elect for 5 years without IRS consent. Many expats alternate strategies when their income mix changes (e.g., stock comp spikes), but revocation rules make that non‑trivial. Before electing or revoking, model multiple years to see how FEIE affects credits (like the child credit), retirement contributions, and FTC carryovers. If you use both FEIE and FTC, remember you can’t credit foreign taxes on income you exclude.

Reference: Choosing the Foreign Earned Income Exclusion

Run the math by category. FEIE applies only to earned income and reduces your adjusted gross income, which may reduce access to certain credits. FTC applies to foreign‑source income in each category (general, passive, etc.). If Danish tax exceeds U.S. tax on your wages, FTC may zero out U.S. tax on wages and leave your U.S. investment income exposed; FEIE can’t help with passive income. If Denmark taxes your U.S. dividends/interest, treaty re‑sourcing on a separate Form 1116 can increase your FTC capacity for those items. Blend strategies carefully and watch carryovers—FEIE can reduce future FTC absorption room.

Reference: IRS Publication 514

FEIE reduces your AGI, which can reduce or eliminate credits tied to earned income and affect IRA eligibility. If Denmark taxes your investment income heavily, FEIE won’t help absorb that tax—FTC does. FEIE also interacts with housing exclusion/deduction; Copenhagen costs may justify a housing claim, but you must compute the cap. If you expect lumpy equity income (RSUs) or passive income, an FTC‑first strategy often produces better multi‑year results. Model both paths across several years before electing.

Reference: Foreign Earned Income Exclusion

IRA eligibility is driven by U.S. earned compensation and income limits, not by treaties. If you have U.S. tax‑defined compensation (including foreign wages reported on your U.S. return), you may contribute to an IRA up to the annual limit, subject to deductibility phase‑outs. Treaties don’t change IRA rules. However, choosing FEIE can reduce your compensation for IRA purposes (excluded income doesn’t count), which can unexpectedly disqualify contributions. Consider whether FTC (instead of FEIE) better supports your retirement savings goals in a given year.

Reference: IRS Publication 590-A

Treaties don’t change U.S. qualification rules for Roth IRAs. Distributions are tax‑free in the U.S. if they’re qualified (e.g., after the 5‑year period and meeting age or other criteria). If you take nonqualified withdrawals, U.S. rules apply to ordering and penalty exceptions. Denmark’s treatment is separate. From a U.S. perspective, follow the Roth rules in Publication 590‑B; the treaty doesn’t override them. Keep Form 1099‑R and compute any taxable portion as usual.

Reference: IRS Publication 590-B

LOB provisions are anti‑abuse rules that require you to be a qualifying resident to claim treaty benefits. For individuals actually resident in Denmark, LOB is usually straightforward—you’re an individual resident, not a treaty‑shopping entity—but it still matters when claiming reduced withholding (for example, on U.S. dividends) or when routing income through structures. Understanding LOB avoids nasty surprises where a payer denies treaty rates because you don’t meet the article’s tests. While LOB is more complex for companies and funds, individuals should still be aware of it and be prepared to certify residency when asked by U.S. withholding agents.

Reference: Tax Treaty Table 4

MAP is a treaty process where the U.S. and Denmark tax authorities talk to each other to resolve cases of double taxation or inconsistent treaty application. It’s more common for businesses (transfer pricing), but individuals can use it when, for example, both countries assert residency or both tax the same income contrary to the treaty. You submit a request to the U.S. competent authority with the facts and treaty analysis. It can take time, but when successful, it produces coordinated relief. Consider MAP if normal claims (FTC, amended returns, refunds) don’t fix the double taxation and the treaty clearly supports you.

Reference: Competent Authority Assistance

Start with domestic remedies: claim FTC, file amended returns, or request refunds where you have clear treaty support. If that fails, consider the treaty’s Mutual Agreement Procedure (MAP), where the U.S. and Danish competent authorities consult to resolve double taxation or inconsistent application. MAP is document‑heavy: you’ll need a detailed narrative, treaty citations, assessments, and timelines. It’s not a quick fix, but it can eliminate double tax that ordinary filings can’t.

Reference: Overview of the MAP Process

Consistency is key. If you assert treaty residency in Denmark and file as nonresident for U.S. purposes, you’ll typically file Form 1040‑NR and disclose on Form 8833. Provide your U.S. payers the correct forms: W‑8BEN to claim reduced withholding as a Danish resident, or W‑9 if you remain U.S. resident. Don’t hand a broker W‑8BEN while filing a resident Form 1040 unless a specific treaty article and disclosure supports that posture. Keep copies of your W‑8/W‑9 submissions, residency certificates if applicable, and your 8833 disclosure so everything lines up in case of an IRS inquiry.

Reference: Form 8833

For individuals who are non‑U.S. persons for U.S. tax purposes, Form W‑8BEN is the standard certificate. Complete the treaty claim in Part II, including the specific article, income type (dividends/interest), and any limitations (beneficial owner, LOB). Provide a foreign TIN when required. U.S. citizens/residents generally cannot submit W‑8BEN; they use W‑9. If you’re making a dual‑resident claim under the treaty and filing 1040‑NR, ensure your W‑8BEN matches that position, and retain records. Withholding agents also have their own due diligence procedures and may ask for more documentation.

Reference: Form W-8BEN

Possibly. If you were entitled to a treaty rate as a nonresident resident of Denmark and too much was withheld, you can file a U.S. nonresident return (Form 1040‑NR) to claim a refund and attach Form 8833 if you’re relying on a treaty position. If you’re a U.S. citizen/resident, treaty rates don’t apply to you for withholding, but you can still reconcile on your Form 1040 and use FTC to relieve double tax if Denmark also taxed the item and re‑sourcing applies. Keep Forms 1042‑S/1099 and residency evidence.

Reference: Claiming Tax Treaty Benefits

The FTC focuses on taxes that are compulsory and based on net income. Some local levies may be linked to income, but others are not. Publication 514 explains which foreign taxes qualify and when reductions or subsidies require you to reduce the credit. Document how the tax is computed and whether it’s an income tax or in lieu of one. When in doubt, conservatively exclude non‑income levies from your FTC and consider taking them as itemized deductions if allowed.

Reference: IRS Publication 514

Yes, but you’ll need to untangle sourcing and treaty re‑sourcing. Under U.S. rules, dividends from U.S. corporations are U.S.‑source, so Danish tax on those dividends usually can’t be credited against U.S. tax in the passive category—unless the treaty allows re‑sourcing. Use a separate Form 1116 for “certain income re‑sourced by treaty,” cite the treaty, and include only the income and tax that Denmark taxed. If over‑withheld at 30%, also explore a refund via 1040‑NR (if nonresident) or ensure broker documentation is updated (W‑8BEN) going forward.

Reference: Foreign Tax Credit Special Issues

Keep a simple dossier: (1) your residency analysis under Article 4 with tie‑breaker notes, (2) a list of treaty articles you rely on (with quotes), (3) copies of Forms 2555/1116/8833/8938 (and 8621 if applicable), and (4) Danish assessments showing tax by type and year. That packet makes audits, MAP requests, or broker withholding corrections much easier. Model FEIE vs. FTC before filing, and don’t assume PFIC or pension issues are “covered by the treaty” without checking the technical explanation. Small admin steps upfront save months later.

Reference: Denmark Tax Treaty Documents