The employer is not to withhold any tax from the wages and salaries of Danish employees unless the Danish Tax Agency has expressly informed him to do so.

The employer must withhold 8% labour market contribution and 30% hydrocarbon tax from the wages and salaries of the foreign employees. The tax payable amounts to a total of 35.6% of the gross income.

Exemption from withholding tax will be given to foreign employees who expect to live in Denmark for at least six months or to employees where Denmark has ceded the right of taxation according to a double taxation convention.

The employer must withhold taxes from the wages/salaries of all foreign employees unless we have given an exemption.

NB! An exemption requires an application about this from the employer.

The time at which tax must be withheld

The employer must withhold the tax at the time where the wages/salaries are paid or any time before this when payment can be claimed according to the contract of employment.

The taxation basis

The 8% labour market contribution must be calculated on the basis of the employee's gross income earned during work in Denmark (except the value of free food and accomodation). The 30% hydrocarbon tax must be calculated on the gross income less the 8% labour market contribution calculated. The total tax payable thus amounts to 35.6% of the gross income. No deductions are allowed when calculating the tax.

The following must be included in the basis of calculation:

• wages earned during time off in lieu relating to work performed in Denmark
• bonuses
• holiday pay
• contributions to a pension scheme
• contributions to group life insurance and the employees' payment of national health insurance to their home country.

The above list is by no means exhaustive.

lf the employer has agreed with the employee that the first mentioned is to pay the taxes assessed on the employee, the basis of taxation is found by dividing the net wages and salaries by 0.644.