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

If you, as an employer, have received a demand for payment of income tax and social security contributions, it may be due to the obligation to withhold such amounts for employees – that is, individuals who receive a salary and are subject to the employer’s instructions and supervision.

In contrast, if the work is carried out by individuals hired to perform specific jobs without any established relationship of instruction or supervision, there is generally no basis for levying income tax and social security contributions on the hiring entity. The distinction between salaried employees and self-employed people is based on a range of different factors defined in legal practice and assessed on a case-by-case basis.

If SKAT raises questions about whether you or your company is obligated to withhold income tax and social security contributions, it is crucial to find out whether this obligation 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.

TVC Law Firm is Denmark’s leading law firm in the field of tax law, conducting the highest number of tax cases for both individuals and businesses. We have the expertise to ensure your case is handled professionally and that a constructive dialogue with SKAT is established from the outset.

We strongly recommend seeking professional advice early in the process. It is essential to determine whether you or your company are obligated to withhold income tax and social security contributions – and whether you may be liable for amounts that should have been withheld.