If as a Danish business you hire an employee who does not live in Denmark and who has an employer from another country than Denmark, the employee is liable to pay tax according to the rules on international hiring-out of labour.

  • The employee is liable to pay 8% labour market contributions (am-bidrag) and 30% hiring-out of labour tax.
  • You as a business must ensure payment of the tax.
  • The rules on hiring-out of labour apply even though the foreign employer is registered for VAT in Denmark.

The Danish Parliament (Folketinget) has passed an aid package for corona-hit businesses

As a result, the deadline for paying A-tax and labour market contributions are extended for the months of April, May and June 2020.

Please read more at www.skat.dk/corona-aid 

International hiring-out of labour is the term used if the employees of a foreign enterprise are made available to a Danish enterprise, and the employees perform work which forms an integral part of the Danish enterprise.

The work may form part of the core services of the enterprise, or it may be a natural part of the enterprise's operations, for example bookkeeping, cleaning or canteen management.

The decisive factor is whether the employee is, in effect, at the disposal of the Danish enterprise in the way considered normal for an employee.

The international hiring-out of labour always involves three parties

  • A Danish enterprise hiring the labour.
  • An employer from a country other than Denmark hiring out the labour, such as for example a temp agency or another enterprise.
  • A foreign employee who is employed by the foreign employer.

It does not matter whether the contract concerning the supply of labour is referred to as a contract for the international hiring-out of labour, or a project contract. What matters is whether the foreign employee is, in effect, working for the Danish enterprise on terms which basically correspond to the employee being in the service of the Danish enterprise.

When is a situation not considered international hiring-out of labour?

Foreign employees are not covered by the rules governing the international hiring-out of labour when the work performed

  1. is not an integral part of the enterprise's core services or operations, or
  2. has been separated into an independent foreign enterprise.

When there is doubt as to whether the services are sufficiently separated

The decision as to whether the work is clearly defined and separated into an independent foreign enterprise is based on a specific assessment. In such a situation, it is important to determine which of the parties is mainly responsible and bears most of the financial risk associated with the work performed.

Supplementary criteria

If the criteria concerning responsibility and financial risk indicate that no separate foreign enterprise exists and that the Danish enterprise is therefore the real employer, it may be relevant to look at the following supplementary criteria:

  • Who instructs the employee on how to perform the work?
  • Who checks and is responsible for the workplace?
  • Is the Danish enterprise invoiced for the wages/salaries?
  • Who supplies tools and equipment?
  • Who decides how many employees are required to perform the work and what their qualifications should be?
  • Who picks the employee who will perform the work, and who has the right to remove the employee from the job?
  • Who has the right to impose work-related sanctions on the employee?
  • Who decides working hours and holidays?

When do the rules on the international hiring-out of labour not apply?

The rules do not apply when:

  • The employee is fully tax liable in Denmark.
  • The employee is subject to limited tax liability as regards the wages/salaries received for work performed in Denmark due to the employee's residential status, or because the employee is directly employed by a Danish employer.
  • The agreement on the hiring-out of labour is concluded by two Danish enterprises, and it is not a case of the international hiring-out of Labour.
  • The foreign employer hiring out the labour has a permanent establishment in Denmark.
  • The employee is a performing artist, musician, circus performer or athlete.

Examples of the international hiring-out of labour

Example 1:

A Danish IT company (A) is responsible for the support and maintenance of an IT system for one of its Danish customers. For a period of five months, A does not have enough employees to perform the work and is therefore hiring in five employees from a foreign IT company (B) to help carry out the work. A is responsible for training the five employees, who work in teams together with A's own employees. It is thus a situation of A being in need of resources to carry out work which A's own employees are also performing. It is also possible for A to instruct, guide and control B's employees, which speaks in favour of this being an instance of the international hiring-out of labour.

Example 2:

A Danish customer enters into a contract with a Danish construction company on the construction of a large building. The construction work is on such a scale that the Danish construction company enters into an agreement with a foreign construction company under which the foreign company will perform some of the work. As the work progresses, it is agreed what jobs should be performed by the foreign construction company's employees, and the number of hours worked by the foreign workers on the construction project are invoiced. The services to be provided by the foreign company are not clearly defined and individualised in advance. The Danish construction company is responsible for procuring materials for the project. Based on an overall assessment, this is a case of the international hiring-out of labour.

Example 3:

A Danish horticultural enterprise (A) enters into an agreement with a foreign enterprise (B) on the picking of 2 tonnes of cucumbers for A. Under the agreement, B makes a works manager, vegetable crates and employees available. The work is carried out at the premises of A's horticultural business, and A is responsible for growing the cucumbers. The work is basically planned and performed to fit in with the operations of the horticultural business, including the timing of the selling of the cucumbers. It would therefore be an instance of the international hiring-out of labour.

Examples of situations that are not international hiring-out of labour

Example 1:

A Danish construction company builds single-family homes. The company carries out the bricklaying and carpentry work using its own employees. As regards the flooring, the Danish company enters into a subcontract with a foreign enterprise, which carries out the work at a fixed price agreed in advance. The work is performed exclusively by the flooring company's own employees under the management and responsibility of the flooring company. Under the agreement, the flooring company supplies most of the flooring and construction materials. Any defects or nonconformities are remedied by the flooring company at its own expense. The work must be regarded as an independent service supplied by a foreign enterprise, and the service supplied by the flooring company is clearly defined and separate from the work performed by the Danish company.

Example 2:

A Danish consultancy firm hires a consultant to supply a specific and clearly defined service for a specific project. The consultant is employed by a foreign enterprise. The foreign enterprise supplies the service to the project at a price agreed in advance. One of the Danish company's own employees is a specialist within this particular niche, but this employee is busy with other things. The task is performed independently by the foreign consultant, i.e. without guidance, instruction or control by a project manager. The Danish company's project manager is responsible solely for coordinating the performance of the consultant's task with the rest of the project activities. If, based on an overall assessment of the other relevant supplementary criteria, the foreign consultant is deemed to have supplied an independent service, this is not a case of the international hiring-out of labour.

Example 3:

A manufacturer stops making deliveries of its own products to customers. Instead, the deliveries are handled by a self-employed haulage contractor. In other words, the task is outsourced to an independent haulage contractor and is no longer an integral part of the company's activities.

If you employ or hire an employee who does not hold a Nordic (EEA) or EU passport, you need ensure that the employee has residence and work permits. See guidance at www.newtodenmark.dk.

The above rules apply to contracts concluded or changed on or after 20 September 2012. For contracts concluded before this date, the rules apply from 1 October 2013.

Hiring-out of Labour tax

You must make a list of hired employees and their taxes every month. The gross income and the tax must be in Danish kroner, and you must use the exchange rate applicable on the day when you withhold the tax.

Use the form below to make the declaration:

Form 01.010 (Arbejdsudleje/International Hiring-out of Labour)

How much to pay

You must withhold and pay 8% labour market contributions and 30% hiring-out of labour tax on behalf of the employee to the Danish Tax Agency. This applies both when you hire the foreign labour directly from the foreign employer, and when the hire contract has been arranged and invoiced through another business or temp agency.

You must pay the tax yourself if you forget to withhold it when paying the employer.

Calculating international hiring-out of labour tax

The foreign employer must provide you with documentation showing the gross income of the employee.

If you do not receive documentation of the employee's gross income, you must calculate the hiring-out of labour tax on the basis of the invoice amount. You must withhold the tax in the payment to the foreign employer.

If the foreign employee chooses to have the tax calculated according to the general rules on limited tax liability, or if the employee is subject to full tax liability, you must withhold tax and labour market contributions as if the employee was employed by your business.

The employee's gross income

The employee's gross income consists of:

Salary, bonus, commission, allowance etc. including:

  • time off in lieu earned in connection with work performed in Denmark
  • holiday pay earned in connection with work performed in Denmark
  • travel and transport allowances
  • value of free food and accommodation if the employee is not considered to be travelling
  • other kinds of taxable employee benefits


Hans lives in Germany, and his German employer hires him out to you. The price amounts to DKK 30,000, which can be either remuneration for a number of hours of odd jobs or remuneration for performing a certain job. Hans is paid DKK 18,000 and the value of free food amounts to DKK 2,000. In total the gross income amounts to DKK 20,000.

This is how you calculate Hans' Danish tax
Items Amount

Labour market contributions (8% on gross income of DKK 20,000)

DKK 1,600

International hiring-out of labour tax (30% on gross income of DKK 20,000 less labour market contributions of DKK 1,600)

DKK 5,520

Total tax is 35.6% on gross income

DKK 7,120

This is how you calculate Hans' Danish tax

This is how you settle the tax

  • You pay the hire of DKK 30,000 to the German employer less Hans's tax of DKK 7,120 = DKK 22,880
  • You pay the tax withheld the Danish Tax Agency = DKK 7,120
  • The German employer pays the salary plus transport allowance of a total of DKK 20,000 to Hans less the Danish tax of DKK 7,120 = DKK 12,880
  • The German employer's profit of DKK 10,000 is not taxable.

Paying international hiring-out of labour tax

The tax is payable in Danish kroner to your tax account (skattekonto). You can find the payment ID in E-tax (TastSelv):

  1. Log on to E-tax for businesses (TastSelv Erhverv)
  2. Select 'Skattekontoen' (Tax account)
  3. Select 'Stamoplysninger' (Master data)
  4. You can now see the payment ID

Payments from a non-Danish bank account

When you make a tax payment from a non-Danish bank account, you need to use the below information. Remember to state your SE number (VAT number) in the remarks field.

IBAN number: DK87 0216 4069 1633 94

Account: 02164069163394
Account holder: the Danish Tax Agency

Documentation of international hiring-out of labour tax

Documentation for the employee

The employee will be given the following documentation of paid international hiring-out of labour tax in Denmark:

  • Every month the foreign employer will give the employee a payslip showing the salary earned in Denmark and the Danish tax withheld from this salary.

  • In March or April following the, income year, the employee will get a statement in English from us. The statement will be sent via the Danish principal to the foreign employer to ensure that it reaches the employee's current address.

Documentation for the foreign employer

To document the amount (A-tax relating to international hiring-out of labour) which the Danish principal sets off against the invoice from the foreign principal, the Danish principal may use the following documentation:

  • copy of form 01.010 (form to be completed by Danish businesses liable to withhold tax when hiring foreign labour to perform work in Denmark), and

  • a receipt which the Danish principal can print from his Tax account (Skattekonto) showing the amount paid: "A-skat (Arbejdsudleje)" ("A-tax (International hiring-out of labour")).

Documentation for the Nordic tax authorities

The Danish Tax Agency may issue an "NT3 statement" to document that A-tax (tax deducted from income at source) for employees from the Nordic countries will be withdrawn in Denmark.

When not to base the employee's tax on the hiring-out of labour rules

The employee's salary must be calculated according to an ordinary tax card:

  • when the employee's stay in Denmark exceeds 183 days within a period of 12 months, or
  • when the employee is or becomes subject to full tax liability in Denmark. The employee becomes subject to full tax liable in Denmark if he has a residence in Denmark or if he stays in Denmark for six consecutive months.

The employee must be registered for a tax card in accordance with the rules described under Non-Danish labour.

The Danish business must withhold tax and labour market contributions (am-bidrag) and report these in E-income. If the employee does not have a tax card, 55% of the salary must be withheld.

You will be liable to pay the outstanding tax if you continue to withhold hiring-out of labour tax knowing that the employee has been in Denmark for more than 183 days within a 12-month period.


Hans lives in Germany and his German employer hires him out to you. The first few months you have withheld hiring-out of labour tax. When you realise that his stay will exceed 183 days within a period of 12 months, Hans will need to apply for a personal tax number and a tax card effective from his first day of work in Denmark. Please state that hiring-out of labour tax has been withheld for the first few months, so that Hans will be credited the hiring-out of labour tax already paid. Then, you report the salary information in E-income.

Just before Hans was hired out to you, he was hired out for a month to another Danish employer. You need to include this period in the 183 days.

The employee may choose to have the tax calculated based on an ordinary tax card after the end of the year by submitting a tax return before 1 September (moved from 1 May due to the corona situation) of the year after the income year. The employee must be registered as described on the page Foreign labour, and it must be stated that hiring-out of labour tax has already been paid.

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