If you live outside Denmark, are employed by an enterprise which is not Danish, and you are going to perform work in a Danish enterprise, you are liable to pay 8% labour market contributions and 30% international hiring-out of labour tax. The Danish enterprise pays the tax on your behalf. After that, your employer deducts the Danish tax before he pays you your salary.

  • You are liable to pay 8% labour market contributions and 30% international hiring-out of labour tax.
  • The Danish enterprise makes sure that your Danish tax is paid.
  • You do not need to file a tax return, but you will receive a statement of Danish taxes paid.
  • You can choose to pay tax according to the general rules on limited tax liability, which will entitle you to certain deductions and variable tax rates.
  • You can obtain tax relief in your home country.

The rules on 30% international hiring-out of Labour tax do not apply in the following situations:

  • If you become subject to full tax liability in Denmark because you get a residence or stay in Denmark for a consecutive period of at least six months. The six-month period includes short stays abroad for leisure or holiday. 

  • If you become subject to limited tax liability in Denmark according to the general rules because you stay in Denmark for more than 183 days within any 12-month period.

  • If your salary is paid by a Danish business authorised by the foreign employer.

  • If your foreign employer has a permanent establishment in Denmark.

    In the above situations, you must apply for a tax card and pay tax according to the general Danish tax rules. The Danish business hiring you or your employer will withhold Danish tax according to your tax card.

  • If you are hired out to a foreign business which is not liable to pay tax in Denmark or which pays tax according to the rules on hydrocarbon tax. 

  • If you are a performing artist or a sportsman who is hired out to perform work in Denmark. 

  • If you live in a Nordic country and work offshore Denmark in connection with oil extraction, you are only subject to tax if you stay in Denmark for more than 30 days within a twelve-month period.

You are liable to pay 8% labour market contributions and 30% international hiring-out of labour tax on your total salary, including taxable employee benefits such as company car, free food and accommodation, which you earn by working for the Danish business.

The Danish business hiring your labour must make sure to pay your tax and deduct the tax when paying your employer. Your employer will then deduct the Danish tax before he pays you the salary. 

How to calculate your tax if you earn DKK 20,000

Amount

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

DKK 1,600

International hiring-out of labour tax: 30% on (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

You do not need to have a Danish civil reg. no. (CPR number), nor to file a tax return. Your employer will give you a statement of Danish taxes paid issued by the Danish Tax Agency (Skattestyrelsen), which shows your taxable income and how much Danish tax you paid. You can obtain tax relief in your home country on presentation of this statement.

You can choose to have your tax calculated according to the rules on limited tax liability. You need to make a choice no later than 1 May in the year after the income year by filing an income statement. The tax will then be calculated according to the general Danish tax rules, which will entitle you to certain deductions and variable tax rates.

You can also choose to pay tax according to the rules for cross-border workers if at least 75% of your gross income is from Denmark.

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