As a posted worker from a foreign company you will normally be exempt from paying taxes in Denmark the first six months of working here. But you might risk having to pay taxes in Denmark from day one if SKAT estimates that you have been hired out to a Danish company. If so, the rules are as follows:
- The taxes are 8 % in AM-bidrag (labor market contribution) and 30 % in arbejdsudlejeskat (“hiring out labor” tax).
- The Danish company must ensure that the taxes are paid.
- The rules on hiring out labor apply regardless of whether the foreign employer is registered in Denmark.
An example on hiring out labor:
A Danish customer makes an agreement with a Danish construction company to construct a large building. The construction work is so extensive that the Danish construction company makes an agreement with a foreign construction company to do parts of the construction work.
In connection to the construction work it is regularly agreed which tasks the workers of the foreign company oversee, and it is settled in relation to the number of hours the workers of the foreign company work on the construction work. The services of the foreign company are not clearly defined and individualized beforehand.
The Danish construction company oversee buying the materials being used for the construction work. After an overall assessment it will be seen as hiring out labor.
An example that is not hiring out labor:
A Danish construction company are building houses. With its own employees the company are doing most of the masonry and carpentry contracts. When it comes to the flooring the Danish company makes a contract with a foreign flooring company who will be doing the flooring work at a fixed and agreed price.
It is solely the flooring company’s own employees who do the flooring work under the management and responsibility of the flooring company. By agreement the flooring company delivers the main part of the flooring and building materials.
Any complaints will be handled and paid for by the flooring company. The work must be regarded as an independent service delivered by an independent foreign business and the service delivered by the company must be separated in relation to the Danish company.
Please contact the union if you are in doubt and preferably as soon as possible so you do not get a large tax after-payment.