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 Subject: Freelancing in Denmark - for Foreign Employer... 07/01/11, 15:56 
nicole.terhorst
Newbie
Joined: 14/11/10, 14:20
Posts: 1
Location: 
Hello, I hope anybody of you has experience with my particular "problem" and can help with some advice.
I will move to Copenhagen at the end of January and will keep my current full-time job, but as a freelancer. I will be working for a German company but will of course pay my taxes in Denmark.
Do you know if I can still invoice the typical 19% "Mehrwertsteuer" (some form of VAT) on my bill for the German companywhile being registered in Denmark? I hope that it might be possible (and legal) somehow as it would help me tremendously to cover the Danish taxes.
Thanks for your help!
Nicole
 Subject: Re:Freelancing in Denmark - for Foreign Employer... 25/01/11, 18:44 
James
Moderator
Joined: 07/03/09, 18:06
Posts: 8
Location: Copenhagen
 
Hi Nicole.

In your case, if you are a totally independent freelancer, you don't need to charge any sales tax at all. This is because if you do business with another registered business outside of Denmark, but inside the EU (like Germany), you do not have to charge them Moms or any other sales tax, so long as you put both of your Moms/VAT numbers on your invoices, and add a zero for Moms. You must then also put the transaction on the EC sales list.

The concept behind it is that the tax is accounted for in the country of the buyer (in your case, Germany). In this way, the German company effectively charges themselves the German sales tax, and immediately claims it back, meaning zero!

Of course if you earn any money from a Danish company, you charge them 25% Danish tax (Moms).

As you can probably read from this, it took me a while to find all this out. The truth is, freelancing here is not super-easy, especially with regards to certain regulations, and trying to understand the danish documentation! :-S

Good luck!

James
Web design and development - http://www.jfbonham.com
 Subject: Re:Freelancing in Denmark - for Foreign Employer... 09/02/11, 21:23 
James
Moderator
Joined: 07/03/09, 18:06
Posts: 8
Location: Copenhagen
 
Thought I should write that actually, it looks like I've got it wrong on this one. It seems for the past year the rules have changed. The above post is correct for trading of goods, but from what I can understand, if you are providing a service as a freelancer to a business customer in another EU country, the VAT is liable in the country of the customer under "reverse charge", in other words, the customer pays the german rate of VAT on your invoices separately to the authorities, and pays you the amount without VAT. Details are on this page...

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_en.htm#supply_services

I understand that on your invoice, you need to add a statement saying that the customer is responsible for paying € XXX VAT in their own country, and it is then their responsibility to pay it. This is all highly confusing. I am not sure I understand it right myself so I am going to find out the answer from SKAT tomorrow.
Web design and development - http://www.jfbonham.com
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