10 Things You Need to Know about Tax in Denmark
- 1. When do You Become Taxable in Denmark
- 2. How to Register in the Danish Tax System
- 3. What is Included in Your Taxable Income
- 4. How Much Tax Do You Need to Pay
- 5. Social Security Network for Work within the EU
- 6. Does Your Company Need Foreign Workers
- 7. Company or Self-Employed
- 8. How to Pay Salary to Yourself as a Major Shareholder
- 9. Securities and Other Activities Abroad
- 10. How to Avoid Double Taxation
- Starting a Business
- Does Your Company Need Foreign Workers?
- COVID 19 - THE DANISH TAX AUTHORITY OFFERS AID PACKAGES FOR YOU AND YOUR BUSINESS
- Larger deductions for companies that need to invest in fixed assets or small assets
5. Social Security Network for Work within the EU
Social security in Denmark can apply to you
If you are covered by social security in Denmark, this means that the Danish rules apply to you. Both you and your employer have obligations, in regard the payment of social security contributions. This also means that you are covered by the Danish social security system. Rules about health insurance, welfare, pension, etc. are included in this system.
When you are covered by another country’s rules, the Danish laws are not applicable. If you are sent abroad by a Danish employer for a period of less than three years, you can apply to retain your social security in Denmark. Both you and your employer have duties and rights according to the rules of the country, in which you are covered.
If you are not covered by the Danish rules, your employer must pay social security contributions to the country, where you are covered. Therefore, your employer must examine, where you are covered by social security. This can be achieved by submitting an A1 certificate; and can be submitted accordingly in other EU countries, EEA countries and Switzerland.
Outside of the EU, there are bilateral agreements with several countries. These agreements specify how you are covered with regard to certain individual social security benefits.
What Do You Need to Do?
You and your employer are obligated to examine where you are covered by social security, when you are hired abroad or sent abroad by your employer. If you work in multiple countries, you are required to report the changes of your working conditions and location. Only one of you needs to send an application for social security. At any time, the employer can apply for social security on behalf of the employee. It is best to apply as early as possible.
An A1 certificate is required, even for short stays. Where you are taxable and where you are covered by social security may not be the same. The rules on the two concepts are different; independent from one another.
If you are unsure about where you are covered by social security, contact SkatteInform. We will help you with an evaluation for the country you are looking for. We also help with A1 applications.
*SkatteInform does not take any responsibility for any actions taken based on the information provided in this article, before receiving individual tax advice.