Denmark Tax Agency Clarifies Reporting, Withholding Obligations for Employees in Nonresident Branches of Danish Companies

The Danish Customs and Tax Administration April 28 posted online National Tax Court Decision No. SKM2026.206.LSR, clarifying reporting and withholding obligations for employees in nonresident branches of Danish companies. The taxpayer, a Danish company, paid salaries through nonresident branches to nonresident-branch employees and claimed that the branches were separate employers beyond Denmark’s taxing and reporting authority, which the Tax Agency disagreed with. On appeal, the National Tax Court upheld the Tax Agency’s decision, finding that: 1) the nonresident branches formed part of the same taxpayer under domestic law and applicable DTAs and didn’t violate EU law, including regarding the freedom ...