In- and outposting means that an employee temporarily works in a country other than their normal country of work. Outposting is when an employee from a Danish company is sent abroad to work for a limited period but remains employed in Denmark. This could be, for example, an engineer who manages a project in a subsidiary in Germany for six months. Inposting is the opposite. Here, a foreign employee comes to Denmark to temporarily perform work for a Danish company. In both cases, the workplace changes, while the employment relationship generally continues with the original employer. This has implications for rules on tax, social security and reporting obligations, which depend on which country the work is performed in and how long the stay lasts.

Posting can have significant tax consequences, as the employee may become fully or partially liable to tax in another country. This depends, among other things, on the duration of the stay, the work tasks and the employee's overall connection to Denmark. If a Danish employee is posted abroad, full tax liability to Denmark may cease if the employee is no longer considered to be resident in Denmark. In practice, however, many will continue to be either fully or partially liable to tax in Denmark, especially if they maintain their home, family or other significant connections here. As a rule, income is taxed where the work is physically carried out, unless otherwise provided for by a double taxation agreement. Outposting can also have tax consequences for the employer. A Danish company must assess whether the employee's activities abroad result in the company having a permanent establishment there, which may trigger tax liability in the country in question.

Inposted employees are generally taxed on the income earned from work performed in Denmark, regardless of whether the employer is Danish or foreign. If an employee comes to Denmark to work here temporarily, the person concerned is usually subject to limited tax liability in Denmark. This means that tax is only paid on salary income and any other income related to Denmark – not on income from abroad. If the stay in Denmark is longer, or the employee establishes residence here, for example by renting a home or bringing family, the employee may become fully liable to tax in Denmark. In that case, tax must be paid on the total global income. However, any double taxation can be alleviated according to the rules in a relevant double taxation agreement. The company that employs the posted employee is generally obliged to report wages and withhold A-tax and AM contributions when the work is performed in Denmark. In certain cases, employer obligations may also arise for the foreign company, including the obligation to register as a Danish employer.

When a company is outposting or inposting employees, it has a number of administrative, tax and social obligations that must be handled correctly to avoid errors and sanctions. When outposting, the company must:

• Assess the tax situation for both the employee and the company. It must be clarified whether the employee will continue to pay tax in Denmark or whether tax liability will arise abroad.
• Check double taxation agreements to ensure that wages are not taxed twice.
• Investigate whether the outposting results in a permanent establishment abroad, which may mean that the company will become liable to tax there.
• Handle social security (A1 form) and any insurance conditions so that the employee continues to be covered according to the correct rules.
• Ensure correct wage reporting, possibly both in Denmark and abroad, depending on the tax status.

• Clarify whether the employee will be subject to limited or full tax liability in Denmark.
• Register as a Danish employer in the Danish Tax Agency's system (E-indkomst) if the company is to pay wages and withhold A-tax and AM contributions.
• Ensure that the employee has a valid work permit and CPR/tax card before work begins.
• Consider whether the employee can be covered by the researcher tax scheme (27% scheme).
• Report and document any accommodation expenses, per diems and fringe benefits so that they are handled correctly for tax purposes.

Social security: As a general rule, you are covered by social security in the country where you physically carry out your work. This means that if a Danish employee works in Germany, social contributions must generally be paid in Germany. There are exceptions within the EU/EEA and Switzerland, where the rules allow you to remain covered by Danish social security during a posting. This requires that you obtain an A1 certificate from benifit services in Denmark (Udbetaling Danmark), which documents that the employee is still covered by Danish social legislation. The A1 certificate is typically valid for up to 24 months, but can be extended in special cases. Pension arrangements: Outposting can also affect pension payments and tax deductions. If the employee is still covered by Danish social security, the company can normally continue to pay into the Danish labour market pension. If, on the other hand, contributions are made to a foreign scheme, the right to deduct depends on the double taxation agreement and any special agreements on pension schemes between Denmark and the country of employment. For employees posted to Denmark, the company must assess whether contributions to a foreign pension can be deducted for tax purposes in this country. In some cases, foreign pension schemes can be recognised as deductible, but this requires that the scheme meets the conditions in the Pension Taxation Act.

For the company, the consequences can be:

• Errors in tax payment and reporting, e.g. if wages are taxed in the wrong country or if A-tax and AM contributions are not withheld correctly. This can lead to additional charges, fines or interest from the Danish Tax Agency.
• Risk that the company will inadvertently have a permanent establishment abroad, which means that the company will be liable for tax there.
• Lack of social security can lead to the employee being left without coverage in the event of illness, work injury or maternity leave, and the company may be liable for damages for lack of insurance.

• Double taxation if tax is paid in two countries without relief.
• Loss of social rights, e.g. health insurance, unemployment benefits or pension accrual.
• Errors in annual statements and income registration, which can result in back tax and problems with documentation for the tax authorities.
• In certain cases, incorrect tax management can also lead to criminal proceedings for tax fraud if the Danish Tax Agency assesses that information has been deliberately omitted.