Foreign employees who work in Denmark for a foreign enterprise without a venue carrying out work in connection with preliminary surveys, exploration, and extraction of hydrocarbons in Denmark, and who are not liable to tax according to section 1 of the Danish Withholding Tax Act, are liable to tax under the Danish Hydrocarbon Tax Act.

8% labour market contribution and 30% hydrocarbon tax

Employees must also pay 8% labour market contribution on the gross income according to Act on Labour Market Contribution. Subsequently the 30 % hydrocarbon tax must be calculated on the gross income less the 8% labour market contribution calculated. The value of free food and accommodation is not taxable. No deductions are allowed when calculating the above taxes.

The total employee tax is payable by the employer, who must withhold the tax calculated in connection with the payment of wages and salaries. The employees need not file an income tax return but will receive a tax assessment notice issued by us in the beginning of the subsequent calendar year.

The tax assessment notices will be forwarded to the foreign employers who then must pass them on to the employees.

Double taxation conventions

Denmark has the right to tax employees being residents of the United Kingdom from day 1 for work performed offshore Denmark.

As to employees being residents of one of the Nordic countries, Denmark has the right of taxation regarding work performed offshore Denmark for a period or periods exceeding in the aggregate 30 days in any 12 months period.

Furthermore, residents of other countries will be liable to tax in Denmark if their employer is deemed having a permanent establishment in Denmark in accordance with the conditions stated in the convention concluded between Denmark and the country in which the individual employee is domiciled. Internal Danish tax rules apply in case of a lacking double taxation convention.

Residents of several countries may also be liable to tax, if they work in Denmark for a foreign employer who is not a resident of the employees' home countries.

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