The IT company tailors computer programmes to the customer's needs. The company's two full-time IT consultants, Chris and Paul, are based with the customers, often spending six to twelve months with the same customer. The IT company finds payroll accounts and mileage records inconvenient and therefore suggests that Chris and Paul register for VAT and in future send a monthly invoice based on the same hourly pay rate plus transport allowance based on the national tariff plus 25% VAT.

Our assessment

There is no change in Chris and Paul's work status. It is still the IT company that invoices the end customers and organises and assigns the jobs as before. The IT company bears the financial risk in relation to the end customers. Consequently, the two consultants are still considered as employees, despite the fact that they issue invoices. The IT company is still required to withhold A-tax (tax deducted from income at source) on the fees paid to the consultants.

Sophie is a freelance consultant with an interior design company advising private customers on interior design and home renovation. The company contacts Sophie every two weeks to tell her which customers to visit and when. The interior design company has agreed a price with the customer, and Sophie then knows how long she has to do the job. Sophie does so many jobs for the interior design company that it has become her sole client. Sophie's consultancy business generates a sizeable profit, as her only expense is the cost of running her car. In practice, she has agreed with the interior design company to send an invoice every two weeks. The invoice specifies her fee, which is divided into the number of hours spent, transport expenses plus VAT.

Our assessment

Sophie is an employee. She runs no financial risk, as it is the interior design company which is paid by the customer and responsible for the assignment. The company decides which customers she needs to visit and how long she can spend on each job. Sophie works solely for the interior design company and is paid as an employee on an hourly rate plus transport allowance.

Martin runs a small farm of 11 hectares. He grew up on the farm, and its location is key to him and his family. Martin grows crops and breeds pigs and he has a part-time job. His business operates at a loss.

Our assessment

Martin's business is a non-commercial enterprise. Despite being run in a technically/agriculturally proficient and responsible manner, the farm is unlikely to generate a profit.

David owns and runs a hunting and fishing shop with four employees. He has been contacted by the local evening school, which wants him to teach students seeking a hunting licence. He will have to teach one or two groups of students. Each group is expected to need eight to ten evenings of instruction in order to qualify for a hunting licence, which comprises a practical and a theoretical test. David is paid DKK 1,250 per evening class. David has to prepare teaching materials, whereas advertising and teaching facilities will be provided by the evening school.

Our assessment

David is taxed as self-employed on the income he derives from his hunting and fishing shop, as he runs this shop at his own risk.

To David, the income from the evening classes represents salary/wages. He receives a fixed fee per evening class, irrespective of the number of students. David does not run a financial risk because he receives a fixed fee. Furthermore, David has no operating expenses exceeding what is considered normal for an employee.


Please see our legal guide (in Danish) for further legal information.