Danish developers, designers and consultants usually invoice through an enkeltmandsvirksomhed, a sole trader business with a CVR number, or through their own ApS. They pay their own income tax and the 8% AM-bidrag, and a foreign client withholds nothing. Two things need attention. Some freelancers work without a CVR number and are paid as B-income. And SKAT decides employee or contractor on the whole relationship, not on the contract’s title.
Enkeltmandsvirksomhed with a CVR number, or an ApS
A contractor registers a business on virk.dk with MitID and receives a CVR number (skat.dk, checked 2026-09-29). For EU purposes the VAT number is DK plus the 8-digit CVR number (skat.dk, checked 2026-09-29).
| Enkeltmandsvirksomhed | ApS | |
|---|---|---|
| What it is | The person trading under a CVR number, with personal liability | A private limited company |
| Set-up | Registration on virk.dk | Minimum capital DKK 20,000 since 1 January 2025 (dinero.dk) |
| Tax on profit | Personal income tax plus AM-bidrag; profit kept in the business under the business tax scheme is taxed at 22% until withdrawn | Corporate tax 22%; dividends 27% up to DKK 79,400, 42% above |
| US form | W-8BEN | W-8BEN-E |
Rates for 2026 from the Ministry of Taxation: business tax scheme, corporate tax, share income (checked 2026-09-29).
A trader expecting under DKK 50,000 of sales can run a PMV (personally owned small business): the CVR number stays, no VAT is charged, and the business result goes into the annual tax return. Above that, it becomes an ordinary sole trader and registers for VAT (skat.dk, checked 2026-09-29).
Since 1 January 2026 personally owned businesses with net turnover above DKK 300,000 in two consecutive years must keep digital bookkeeping (businessindenmark.virk.dk, checked 2026-09-29).
Freelancers without a CVR number: B-income
Pay with no tax withheld is B-income. The freelancer enters the expected amount in their preliminary income assessment on skat.dk and pays tax and AM-bidrag in 10 instalments, every month except June and December (skat.dk, checked 2026-09-29).
A foreign client has little to do here. Danish reporting of B-income is a duty of payers domiciled in Denmark or operating from a permanent establishment there (Tax Reporting Act §47, checked 2026-09-29), and the freelancer must report non-Danish income themselves (skat.dk, checked 2026-09-29). The cost is on the classification side: a person with no CVR number, no VAT registration and one client is missing most of the markers SKAT reads as independent business. For recurring work, ask the contractor to register, or put a platform or Contractor of Record between you.
Income tax and AM-bidrag
AM-bidrag is 8% of salary, B-income and business profit, deducted before income tax (skat.dk, checked 2026-09-29). Income tax is municipal tax, set by each municipality, plus state tax. For 2026:
| State tax | Rate | Applies to personal income above |
|---|---|---|
| Bottom-bracket tax | 12.01% | Personal allowance of DKK 54,100 |
| Middle-bracket tax | 7.5% | DKK 641,200 |
| Top-bracket tax | 7.5% | DKK 777,900 |
| Top-top-bracket tax | 5% | DKK 2,592,700 |
Thresholds are after AM-bidrag (skat.dk, checked 2026-09-29). The personal allowance and a 44.57% tax ceiling on personal income come from the Ministry of Taxation (checked 2026-09-29). None of this changes what you pay; it explains why Danish rates quoted “before tax” are high.
VAT. The standard rate is 25% (skat.dk, checked 2026-09-29); registration is due above DKK 50,000 of sales a year (skat.dk, checked 2026-09-29). A business supplying services to a business in another EU state under reverse charge must register at any turnover under VAT Act §50 c (tax.dk, Den juridiske vejledning D.A.14.4, checked 2026-09-29). Its invoices then state “omvendt betalingspligt”.
Requalification risk
There is no single statutory test. SKAT weighs the relationship with each client as a whole, and no single criterion decides (info.skat.dk, C.C.1.2.1, checked 2026-09-29):
- Toward employment: the client can give general or specific instructions, sets working hours, pays periodically by the hour, week or month, owes notice, bears the work expenses; the person works only or mainly for that client.
- Toward independent business: the person organises and supervises the work, carries economic risk, owns the tools, has several clients or their own premises, is paid by invoice and is VAT-registered.
A relationship recast as employment brings employee rights with it. A Danish employee accrues 2.08 days of paid holiday for each month of employment, up to 25 days a year (borger.dk, checked 2026-09-29). Whether a foreign company must then withhold Danish tax depends on its presence in Denmark, including any permanent establishment; take local advice before a long single-client engagement.
Low-risk markers: deliverables rather than hours, the contractor’s own schedule and equipment, other clients, a CVR and VAT number on the invoice. High-risk: full-time for you alone, your manager assigning daily tasks, a monthly fee that behaves like a salary.
Contract and IP
- A written services agreement with the contractor’s business, scoped to deliverables, rate and currency, with the independence markers above.
- Software. Copyright Act §59 passes an employee’s software to the employer; a contractor is not an employee, so nothing passes without the contract (danskelove.dk, checked 2026-09-29).
- Scope of the transfer. A transfer for particular uses gives no right to other uses (§53(3)), and a transferee may not alter the work unless that is customary or clearly assumed (§56) (dkpto.dk, checked 2026-09-29). Assign all economic rights, including the rights to modify, develop and sublicense, in writing.
Taxes and paperwork on your side
The contractor’s side. CVR registration, VAT registration where required, preliminary income assessment and annual return.
The client’s side. Pay gross against invoices; a foreign client without a Danish presence has no Danish withholding or B-income reporting duty. EU payers check the DK VAT number in VIES and self-account for VAT. US payers collect a W-8BEN (W-8BEN-E from an ApS) and file no 1099. Article 14 of the US–Denmark treaty, signed 19 August 1999, taxes a Danish resident’s independent services only in Denmark unless the contractor has a fixed base regularly available in the US (checked 2026-09-29).
How to pay contractors in Denmark
| Method | What the contractor sees | Notes |
|---|---|---|
| Domestic DKK transfer | Kroner in a Danish account | Via a provider with local payout; instant transfers run 24/7 up to DKK 500,000 (nationalbanken.dk) |
| SEPA transfer (EUR) | Euros in a EUR account | Simplest if the contract is in euros and you hold euros |
| SWIFT (USD) | Converted to the account’s currency at the bank’s rate | Fees can be deducted from the amount on arrival |
MobilePay is a Nordic phone-number app, not a rail for company payouts. Rails, costs, failure points and platforms are compared in how to pay contractors in Denmark.
Contractor of Record in Denmark
A Contractor of Record signs with the contractor in your place, which reduces misclassification risk where an engagement shows several of SKAT’s employment markers or the freelancer has no CVR number. 4dev acts as Contractor of Record — the contracting party for each contractor — which reduces reclassification risk. Deel, Native Teams, Rivermate and Remote also sell the model; what moves to the provider is set by the liability clause in its COR contract, not by the product name. Where the work is really a job, use an EOR. Compare providers in our COR rating.