Remote work tax in Denmark — working for a foreign employer

The core question — who taxes your income?

The fundamental principle is straightforward: if you are a tax resident of Denmark, Denmark taxes your worldwide income. This includes salary paid by a foreign employer for work performed while you are physically in Denmark.

You become a Danish tax resident when you have a “home” (bolig) available to you in Denmark, or when you stay in Denmark for a continuous period of 6 months or more. Once you are tax resident, Denmark expects you to pay Danish income tax on your employment income — regardless of where your employer is based or where they pay you.

The complication is that your home country may also want to tax the same income. This is where double taxation treaties, the 183-day rule, and social security agreements come in.

The 183-day rule — what it actually means

The 183-day rule is the most misunderstood concept in cross-border taxation. Here is what it actually says.

Under most double taxation treaties (based on the OECD model), your employment income is taxable only in your country of residence — even if you work in another country — provided all three of these conditions are met:

1. You are present in the other country for no more than 183 days in any 12-month period (or fiscal year, depending on the treaty)
2. Your salary is paid by an employer that is not resident in the other country
3. Your salary is not borne by a permanent establishment that your employer has in the other country

Permanent establishment (PE) risk — the employer’s problem

This is often the bigger concern. When an employee works from Denmark for a foreign company, the employee’s home office could constitute a “permanent establishment” (fast driftssted) of the foreign company in Denmark. If SKAT determines that a PE exists, the foreign employer becomes liable for Danish corporate tax on profits attributable to that PE.

When does a PE arise?

Under Danish tax law and most double taxation treaties, a PE can arise when:

• The employee has a fixed place of business in Denmark (e.g. a home office used regularly and systematically for the employer’s business)
• The employee has authority to conclude contracts on behalf of the employer in Denmark
• The employee habitually exercises this authority in Denmark

A single remote worker performing routine tasks (software development, design, analysis) from a home office generally does not create a PE — but the assessment depends on the specific facts. If the employee negotiates deals, signs contracts, or manages client relationships from Denmark, PE risk increases significantly.

Social security — where do you pay contributions?

Social security (social contributions, pension, healthcare) is separate from income tax and follows its own rules.

Within the EU/EEA

EU Regulation 883/2004 governs which country’s social security system applies. The general rule is: you pay social security in the country where you work. If you live and work in Denmark, you should be covered by Danish social security — even if your employer is in Germany, France, or any other EU country.

Your employer needs to register with Danish social security authorities and pay AM-bidrag (labour market contribution, 8%) and ATP (supplementary pension). You can obtain an A1 certificate from the relevant authority to confirm which country’s system applies.

Outside the EU

Denmark has bilateral social security agreements with some non-EU countries (including the USA, Canada, Australia, India, and others). These agreements typically prevent double social security contributions. If no agreement exists, you may face contributions in both countries — consult an advisor.

Double taxation treaties — how relief works

Denmark has double taxation treaties with over 80 countries. These treaties prevent the same income from being taxed twice. The typical mechanism is:

• Credit method: Denmark taxes your worldwide income but gives you a credit for tax paid in the other country. You effectively pay the higher of the two rates.
• Exemption method: Income taxed in the other country is exempt from Danish tax (but may affect the tax rate on your remaining income — “exemption with progression”).

Which method applies depends on the specific treaty between Denmark and your employer’s country. In practice, you will usually pay Danish tax rates (which are among the highest in the world), with credit for any tax withheld by your employer’s country.

Common scenarios

Scenario 1: You move to Denmark, keep your foreign job

You relocate to Copenhagen, work remotely for your employer in London/Berlin/New York. You become a Danish tax resident. Denmark taxes your salary. Your employer may need to register in Denmark, withhold Danish tax, and pay social security contributions. If they refuse, you become responsible for reporting and paying the tax yourself (as B-income on your annual return).

Scenario 2: Your partner moves to Denmark, you work remotely temporarily

Your partner got a job in Copenhagen. You plan to work remotely for your current employer for 6–12 months while finding a local job. Same rules apply — you become a Danish tax resident, and your income is taxable in Denmark from the date of residence.

Scenario 3: You freelance for foreign clients from Denmark

You are self-employed, registered with a CVR number, and invoice foreign clients. Denmark taxes all your income. You charge 0% Danish VAT on services to EU business clients (reverse charge) and to non-EU clients (export of services). You file Danish tax returns and pay AM-bidrag, income tax, and potentially moms.

What your employer needs to do

If your foreign employer wants to remain compliant while you work from Denmark, they generally need to:

• Register with SKAT as a foreign employer — this allows them to withhold Danish tax from your salary and report it properly
• Pay AM-bidrag (8%) — the labour market contribution, withheld from your gross salary
• Pay ATP contributions — the mandatory supplementary pension
• Apply for an A1 certificate (EU employers) to clarify social security obligations
• Assess PE risk — determine whether your role could create a permanent establishment

Employer of Record (EOR) — the practical solution

Many foreign employers do not want to register in Denmark. The practical solution is an Employer of Record (EOR) — a third-party company that becomes your legal employer in Denmark, handles payroll, tax withholding, and social security, while your day-to-day work relationship remains with your actual employer.

Popular EOR providers operating in Denmark include Remote.com, Deel, Oyster HR, and Papaya Global. The employer pays the EOR a fee (typically 5–15% on top of your gross salary), and the EOR handles all Danish compliance. This is increasingly common for tech workers, consultants, and anyone working remotely for a company with no Danish presence.

Tax reporting — what you need to file

• If your employer withholds Danish tax: Your income appears on your årsopgørelse (annual tax statement) automatically. Review it in March/April and correct any errors.
• If your employer does NOT withhold Danish tax: You must report the income as B-income (B-indkomst) on your preliminary tax assessment (forskudsopgørelse) and pay estimated tax quarterly. Failure to do this results in a large tax bill plus interest at year-end.
• Foreign tax paid: Claim credit for any foreign tax withheld on the same income. You will need documentation (pay stubs, tax certificates from the other country).

Getting professional help

This is one area where professional advice pays for itself. A cross-border tax advisor can save you from double taxation, ensure your employer avoids PE exposure, and set up the correct reporting from day one.

• SKAT’s international department — can answer general questions about your tax obligation. Call or write via skat.dk.
• International tax advisors in Denmark — firms like EY, Deloitte, KPMG, PwC, and Mazars all have dedicated international tax teams in Copenhagen.
• Smaller advisory firms — firms like Njord, Bech-Bruun, and Kromann Reumert handle cross-border tax at lower cost than the Big 4.
• Your employer’s tax team — large multinationals often have global mobility teams that handle exactly this situation. Ask HR before trying to solve it yourself.