Employer's Obligation to Withhold Income Tax and Social Security Contributions

Employers are obliged to withhold both income tax and social security contributions from the salaries paid out to employees. However, it is important to distinguish between employees and self-employed persons and to know the applicable rules.

If, as an employer, you have received a demand for the payment of income tax and social security contributions, this may be because employers are obliged to withhold income tax and social security contributions for their employees, i.e. persons to whom employers pay salary and in relation to whom they have powers of instruction and supervision.

In the case of work done by persons hired to carry out specific jobs without powers of instruction and supervision having been established, there will be no basis for levying income tax and social security contributions on the entity hiring these persons. The distinction between salaried employees and self-employed persons is based on a number of different factors that are established in legal practice and which differ from case to case.

If SKAT raises doubts about whether you or your company is obliged to withhold income tax and social security contributions, it is extremely important to find out whether this obligation actually applies. If the case is not handled correctly, there is a risk of you or your company being ordered to withhold and pay income tax and social security contributions on salaries that have already been paid out or which must be expected to be paid out in the future.

We are the Danish law firm that conducts by far the highest number of tax cases for individuals and businesses. We have the necessary expertise to ensure the very best handling of your case as well as a professional dialogue with SKAT from the outset.

We recommend that you ensure that your case is handled professionally from the outset. You need to clarify whether you and your company are obliged to withhold income tax and social security contributions, and also whether you are liable for any income tax and social security contributions that should have been withheld.

Contact

Torben Bagge

Partner, Attorney-at-Law (H), Head of tax and Chairman of the board

D: +45 87 34 75 30

M: +45 24 82 24 84

E: tb@tvc.dk

Leo Jantzen

Manager, Partner, Attorney-at-Law (H)

D: +45 87 34 75 31

M: +45 21 37 01 38

E: lj@tvc.dk

Kasper Bech Pilgaard

Partner, Attorney-at-Law (L), LL.M.

D: +45 33 18 61 58

M: +45 24 27 78 11

E: kbp@tvc.dk

René Bjerre

Partner, Attorney-at-Law (H)

D: +45 87 34 74 34

M: +45 25 34 53 10

E: rbj@tvc.dk

Henrik Rahbek

Partner, Attorney-at-Law (H), HD (R)

D: +45 87 34 74 32

M: +45 30 88 20 88

E: her@tvc.dk

Karin Østergård Mathiasen

Partner, Attorney-at-Law (H)

D: +45 87 34 74 31

M: +45 30 33 75 80

E: kl@tvc.dk

Kasper Kelm Demant

Partner, Attorney-at-Law (L)

D: +45 87 34 74 36

M: +45 51 92 53 58

E: kkd@tvc.dk