The Danish tax authorities take a very restrictive position on the invoicing of directors' fees through consultancy firms, etc. and not as personal income belonging personally to the directors. This is also applicable to foreign residents who are directors in Danish companies, etc. The Danish Tax Assessment Council recently made a decision maintaining the restrictive position in respect of a Swedish resident who was director in a number of Danish companies.
Background
Under Danish company law, a directorship is a personal appointment - a right and a duty - of a certain individual. Thus, only natural persons may be appointed directors - or managers, etc. For the same reason, limited-liability companies, etc. cannot be appointed directors, etc.
Against that background, the Danish tax authorities have over the years been extremely reluctant to recognise, with tax effect, that the directors' fees could be invoiced through an enterprise or a company operated by the director.
Historically, only directors' fees to lawyers and, on very rare occasions, other types of consultancy fees have been recognised as being invoiceable through an enterprise or a company.
In all other circumstances the directors' fees are considered personal income for the directors - irrespective of any other agreement between the director and the company in that respect.
Where the director is a foreign resident it is furthermore important to bear in mind that the directors' fees are separately taxable to Denmark irrespective of the country of residence of the director and irrespective of the physical place of performance of the director's duties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
