Working for a US company in the UK with maybe European work

[jamesbrown]

If you are delivering services that require you to physically be in Denmark, you need to understand who your economic employer is, as mentioned by Sue Ellen. This is not the agency, not your limited company, and not any payroll company. It is the entity that ultimately bears the cost of your services, and benefits from them.

If this entity has a permanent establishment in Denmark, then you are taxable in Denmark from day 1 for the work you do there. Permanent establishment exists in most cases, even if it is just a site office.

As I understand it, the OP wants to contract through their UK-based limited company. If the OP's company has a permanent establishment in the country where they're working, it's that company (and the OP as director) that will bear responsibility for the correct tax treatment of payments made to the OP, and it's possible that the OP's company will create a permanent establishment (e.g. in Finland), as the OP is a controlling person.

[stek]

The best way to think this through is to forget EU rules, the four freedoms etc, they only give you the right to live and work, not the right to choose which tax regime you prefer to be taxed under.

Each EU state has it's own tax rules for individuals and companies the only only real EU-derived benefit is the right to live/work visa/permit free but you absolutely have to do that under local laws and rules. There is no harmonisation here at all other that DTA's where they exist same as other countries in the World.

Working in EU has been seen as this fantastic idea like it's just an extention of the UK but it isn't, not at all. And all tax authorities are becaoming more and more aggressive, look at the German Finanzamt tracking UK contractors and flaying them to death and I know of a case where the Swedish tax authorities just took someone's Stockholm flat. Norway too as we've seen recently on here for just 30 days work.

You have to take the local tax hit (30% in DA if you qualify for ETS), and if you want to return to UK frequently, pay the difference to HMRC under DTA. If not, stay in DA.

Med Venlig Hilsen.....

[Sue B]

As I understand it, the OP wants to contract through their UK-based limited company. If the OP's company has a permanent establishment in the country where they're working, it's that company (and the OP as director) that will bear responsibility for the correct tax treatment of payments made to the OP, and it's possible that the OP's company will create a permanent establishment (e.g. in Finland), as the OP is a controlling person.

Yes, the Ltd Co will have a Permanent Establishment in Denmark under the DTA rules (Place of Management) and its employees are still employed in Denmark. Nothing changes for the OP except the company is also liable. What is the point? There is nothing to be gained by adding another link in the chain.

Of course, it is perfectly acceptable to use a UK Ltd Co in Denmark, providing that you register accordingly (RUT) report the income in line with the rules of the host country (CT, VAT, NI, PAYE etc), and not operate under UK Ltd Co rules, so then, if you have to do all that for no gain, what is the point? Its just adding complication and the Danish tax office do not like it.

[jamesbrown]

Yes, the Ltd Co will have a Permanent Establishment in Denmark under the DTA rules (Place of Management) and its employees are still employed in Denmark. Nothing changes for the OP except the company is also liable. What is the point? There is nothing to be gained by adding another link in the chain.

Of course, it is perfectly acceptable to use a UK Ltd Co in Denmark, providing that you register accordingly (RUT) report the income in line with the rules of the host country (CT, VAT, NI, PAYE etc), and not operate under UK Ltd Co rules, so then, if you have to do all that for no gain, what is the point? Its just adding complication and the Danish tax office do not like it.

No, I agree, I'm just point out the potential complexity if the OP wants to use their UK Ltd. in Denmark and/or Finland. I agree that it doesn't make sense; it almost never makes sense to use a UK Ltd. overseas, given the risk of creating a permanent establishment. To me it seems as though the OP is trying to create unnecessary complexity. They don't need to worry about their US residency status (I'm assuming they're not a US citizen), although they may need to complete a W8-BEN-E (entity) or a W8-BEN (personal), depending on how payment is received from the US agency, and they probably shouldn't be looking to use their UK Ltd. in Denmark or Finland.

[Sue B]

No, I agree, I'm just point out the potential complexity if the OP wants to use their UK Ltd. in Denmark and/or Finland. I agree that it doesn't make sense; it almost never makes sense to use a UK Ltd. overseas, given the risk of creating a permanent establishment. To me it seems as though the OP is trying to create unnecessary complexity. They don't need to worry about their US residency status (I'm assuming they're not a US citizen), although they may need to complete a W8-BEN-E (entity) or a W8-BEN (personal), depending on how payment is received from the US agency, and they probably shouldn't be looking to use their UK Ltd. in Denmark or Finland.

sorry JB, I knew you were agreeing and I was agreeing with you, just didn't come out that way!

[gremlinsky]

sorry JB, I knew you were agreeing and I was agreeing with you, just didn't come out that way!

So I should put my company on ice and look to do this another way?

[stek]

So I should put my company on ice and look to do this another way?

Speak to the people I'm PM'd to you, I use them and as it's my first time with them I don't know if they are any good, but so far they seem to know their stuff, tell me what to do and where to go very clearly, so now I have the Holy Trinity of EU Reg., CPR and SKAT, plus a Danish Doc and can now open a Danish bank account.

They do take a fair chunk though for their services, much more than UK accountants/brollies (about three times more) but rates are much higher and there's the added benefit in that the net goes to you personally, not tied up in Limited and drib-brabbed to you personally over a long time.

I don't think you can avoid going this way if you want piece of mind, no doubt there are scams and people getting away with it but what wants to be looking over their shoulder when there is a simple solution on offer?

Things are bit more expensive here, cheaper than Dublin though, hotels are really dear, hard to find anywhere less than £250 a night, but KFC have an offer on, 9 nuggets for 15kr, about £1.80, and because of the hygiene standards here and no shiite allowed they are MUCH nicer than UK ones!

[stek]

So I should put my company on ice and look to do this another way?

Also my people told me that when at my alternative work places (Sweden and Poland) I can use my limited to invoice, but to be honest it's too much of a faff....

[Sue B]

So I should put my company on ice and look to do this another way?

In a nutshell, yes. There is no clear benefit to you working through your own Limited company in Denmark, rather the opposite, there is a minefield of potential issues. As there is with engaging with any other provider/employer who is offering you a solution that doesn't allow for full Danish taxation.

[gremlinsky]

Also my people told me that when at my alternative work places (Sweden and Poland) I can use my limited to invoice, but to be honest it's too much of a faff....

I phoned them - spot on advice.
Using the ex pat scheme seems to be the way to go working under an umbrella company based in Denmark itself.
The UK company will continue to deal with days spent in the UK.

The only things I need to make sure are:
The US company are happy dealing with things in this way
I'm not spending too much time in Finland or I'll have to go through an umbrella company there also.

At least I feel I understand my options.

I've heard Copenhagen is lovely - is it worth all this hassle ?!!