You’ve started your own business, and you’re therefore not an employee at any other business. But what are you? And should you send fee calculations to your customers or should you send invoices? This can often be hard to navigate.
In general, you are only a fee-based employee if you haven’t got a central business registration number (CVR no.) yet and you’re not running what is called a commercial business. Therefore, if you submit a fee calculation, it will usually be for work that you do in your spare time, or work you do as a freelancer next to your employee job. As soon as you get a central business registration number (CVR no.) and you’re running a commercial business with profits or the prospect of profits, you are no longer a fee-based employee. SKAT will consider you as a fee-based employee if you do work in your spare time for which you are paid a fee or one-off-consideration, even though you are an employee or you are self-employed as your main occupation. As a general rule, you don’t have to register for VAT as a fee-based employee. However, if your turnover exceeds DKK 50,000 before VAT, you should contact SKAT.
However, there are some groups who receive remuneration, often also called fees, and who are considered self-employed businesses anyway. For example, consulting engineers.
If you are not a fee-based employee and instead you run a commercial business, you will send invoices to your customers instead. You need a central business registration number (CVR no.) to send invoices. SKAT considers a business to be commercial when it is operated at its own account and risk in order to earn a profit. This does not mean that your business will only be regarded as commercial if you have a profit, but it should be organised and run in such a way that it is expected to be profitable.
Contact SKAT (the Danish tax authorities) if you have any queries regarding tax.
IDA provides legal advice for the self-employed and freelancers, and for those who are employees and self-employed at the same time. Get legal counselling.