Construction Enterprises - Startseite · 2020-01-07 · Construction Enterprises 3 Introduction If...

Construction Enterprisesoperating in Denmark

January 2020

We can make your life much easier when operating in Denmark

www.ecovis.dk 2Construction Enterprises

Table of contentsPage

Introduction 3How to get the puzzle together for a business 4Getting a Construction Enterprise running in DK 5Global Company Setup 6Construction Enterprise administrative duties 8Handling Employees 9Different Tax situations for employees 10Accounting 11Contact information 13Profile of Ecovis 14

Some more details and Examples 17Labour costs 18Danish Labour Market � flexi security 19Foreigners working in Denmark benefit from the Danish welfare system 20Example of a payslip with 140 DKK per hour 21Total cost for employer 22Example of a Payroll Proposal 23Expat scheme 27% 26Disclaimer 29

This one (Øresund Bridge) has been built, but maybe you are to do something similar looking at where it ends on this picture


Introduction

If you are a Construction Enterprise and plan to operate in Denmark because you have a contract for a project or a part of, we can be of valuable assistance to you in:

Legal structure in the situation whether the solution might be:a) Permanent Establishmentb) Branchc) Limited Companyd) Joint venture

Employeesa) Contractsb) Register at Authoritiesc) Run Payroll

Taxa) VAT registrationb) Excise taxc) VAT Tax returnsd) Transfer Pricing

Accountinga) Bookkeeping, reportingb) Annual Accountsc) CIT Tax Returns

If your structure already are in place we can just start with other issues, we are completely flexible.

Please read the following pages, where we give you an overview of how we can be of assistance to your company. We have divided the presentation into two parts, an overview of the most important issues, and in the back for interested some information in more details.

We can also suggest that you from our website read or download �Doing Business in Denmark� and maybe our information about �Transfer Pricing� if relevant

We can help with administration in form of legal advise, taxes for company and employees, annual accounts, VAT, Transfer Pricing, Tax Return and you can concentrate on your core business in construction, the part that is not too different from country to country

How to get the puzzle together for a business

4

Planning project

Finance

Technical daily

business

FinanceAccounting, Payroll, tax,

legal

www.ecovis.dk Construction Enterprises

Planning project

Phases

Phases and needs for advise and actions to be operative in Denmark

Getting a Construction Enterprise running in DK

5

Structure in the situation

Tax

Accounting

� We advise about Joint Venture, LTD, Branch, PE, what ever.� We incorporate the agreed solution� We register at all necessary Authorities

� We register for VAT, Employer etc.� We advise you on cross boarder VAT for construction enterprises � We can prepare VAT Tax Return, quarterly, monthly

� We can do your bookkeeping� We can prepare the company´s annual accounts and audit� We can prepare CIT Tac return include transfer pricing etc.

How we can help you to achieve the agreed goals.

Employees

� We help with employees contracts that fulfil Danish requirements� We register employees at the Authorities � We run monthly Payroll and money transfer to tax, employees etc..


Let Ecovis be your one-stop point for all your needs regarding international

expansion

Global Company Setup

www.ecovis.dk Construction Enterprises 6

Thanks to our international network, we are perfectly placed for your cross-border Investments.

Our experts at each Ecovis location (in more than 75 countries), offer both pre-market-entry advice as well as help in finding the best legal structure for your venture.Turn-key company set-up service: in your target location our experts on the ground will assist you with all administrative formalities to get your company up and running, including the incorporation of the company and all other necessary steps, like employment and business immigration law, rental agreements, and contractual Arrangements.By working closely with local bank partners, licensing offices and other administrative and regulatory bodies, we ensure a quick launch. As an international network we understand your needs as a foreign Investor.

Of course we will accompany you all the way through the life of your company, be it managing contractual relationships, capital increases, financing or M&As. We always give the best possible legal advice to mitigate any risk, all in a personalized way through direct contact with our local Partners.


Global Company Setup (continued)

How is the cooperation coordinated?

Depending on your needs, we can offer you a sole international contact office that will deal with other locations to coordinate your expansion or we can refer you to the different locations where your company wants to expand for specific local contact.Ecovis is a global consulting firm with a local touch. All locations are managed by independent local offices so that you will get personalized and real expert advice in each specific country.We offer you from the very start tax consulting, accounting, auditing and legal advice.

Our �Daily Business� advisory service

Corporate secretarial services

Administration, registration and other reporting obligations

Fulfilment of sales tax obligations

Payroll accounting and expatriates

Annual accounts, tax returns, tax balance sheets, reporting

Employment and corporate advice

Cross-border tax issues, transfer prices

International newsletters and updates on legal changes

Construction Enterprise

Example of what to do regarding tax and accounting after winning the contract

Construction Enterprise administrative duties

8

contract won

Annual accounts CIT tax return

Hiring people

Run Payroll accounting

Register employees

at tax

VAT Tax Returns TP doc.


How do we assist

Handling Employees

9

Employee issues

� Employee contract

� Register at Tax

� Special Tax Scheme for employees with high salary

� Mandatory pension scheme for those not covered by social security scheme in home country

� Monthly Payroll

Assistance

� Contract models to be used for different kinds of employees

� We register online at tax

� We apply for special tax scheme for employees that fulfil the conditions

� We register individuals at the Insurance company

� We run the payroll with payslips, and all Authorities registrations


Just an overview, more detailed condition can have influence

Different Tax situations for employees

10

Situations

� Limited taxable, income in DK Taxable

� Full taxable

� Hiring out Labour

� Expert Tax scheme

When

� In DK less than 6 month or 183 days � but work for a Danish PE taxable from� day one

� Residence in DK, stay over 6� month/183 days.

� If an integrated part of the Danish organization and managed by the company who hire them tax 35,6% gross

� Fulfil certain conditions and salary more than 68.200 DKK per month



Accounting

Imagine� being fully focused on your business.

As little bookkeeping and bureaucracy as necessary and as much useful and valuable advice as you could wish for.

Apart from assisting in meeting your tax obligations and accounting duties we will support you energetically in solving your financial and commercial issues.

How we can help:

International, financial and payroll accounting

Translation accounting systems from local GAAP to IFRS

Statutory accounts

Preparation of consolidated financial statements

Interim financial statements

Development, implementation & interpretation of monthly / quarterly reporting systems


Accounting (continued)

Payment transaction processing

Administrative services for subsidiaries of foreign parent companies (local directors, secretarial and registered office facilities.)

Consulting

Advice on start-ups and walk-outs

Cash flow management

Improvement projects concerning client�s accounting system

Implementation of cost accounting

Implementation of transfer pricing systems

Accounts training for clients� staff (including IFRS)

Systems and Processes

Development and implementation of group accounting manuals

VAT

Monthly, quarterly and annual VAT reporting

VAT reimbursement for foreign companies


Contact informationPhone: +45 5761 4540 E-mail: [email protected]

Persons to contact directly in international business in Ecovis:

Kurt Bülow, Partner and Head of the International Team in Ecovis Danmark, is State Authorized Public Accountant and Tax advisor. Kurt works with advice for foreign owned companies in Denmark, with Business in health sector, construction industry, chemical industry, transport, wholesale sector, oil recovery, hydrocarbon tax and national and international tax. Member of Ecovis International Supervisory Board.

Bo Langtoft is State Authorized Public Accountant (CPA), partner in ECOVIS Danmark, Bo works with a wide range of international relations, construction companies, manufacturing, travel agencies, service sector, audit reviews of international accounting firms, international tax for both corporations and individuals.Member of ECOVIS International Audit Task Force and Quality Management Board

Preben Pedersen is a State Authorized Public Accountant, partner in ECOVIS Denmark. Preben works with a wide range of industries include special insight into the building industry, transport, chemical manufacturing, wholesale sector, high tech manufacturing companies, financial sector and fiscal conditions. Chairman for the Super Visory Board of LollandsBank. Appointed Managing Partner in ECOVIS Danmark.

Annette Svane is partner and director for our bookkeeping and Payroll Company, Ecovis Svane. Here she leads a team of skilled and motivated financial consultants, who perform a series of administrative tasks for international businesses. She will point out the right accountant consultants in her team to take care of the specific payroll and bookkeeping job..

E-Mail: [email protected]

Direct: +45 5766 2462

Kurt Bülow

Mobile: +4540 51 4540

Bo Langtoft

E-Mail: [email protected]

Direct: +45 5766 2463

Mobile +45 3121 2781

E-Mail: [email protected] E-Mail: [email protected]

Annette Svane

Direct +45 5766 2466

Mobile: +45 4052 2928

Direct +45 5766 2452

Mobil: +45 4074 9267

Preben Pedersen

About Ecovis

Profile


Ecovis is a leading global consulting firm with its origins in Continental Europe. It has over 7,500 people operating in over 75 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.

The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in the back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments � from preparation in the client�s home country to support in the target country.

In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues.

The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth. Whilst never losing focus of the ultimate objective

Global expertise with local faces

Whether yours is an established international business dealing with cross border issues, a family owned company, the branch of a major corporation or a government organisation; we are at your side wherever your business takes you. With Ecovis, you will always have a home advantage. Being there means less communications hassle and increases our understanding of your special situation.

Profile (continued)


We aim to work in partnership with you to provide the support and accessibility of a small company with the wealth of experience that can be expected from a global organisation.

In most instances, we have an international office located at a place near you, and can provide the sort of professional assistance and consulting that is just what you need.With offices in more than 75 countries, Ecovis can help your business fly wherever you choose to take it.

Whether you need tax services, auditing, accounting or legal services, your personal Ecovis consultant has both the local knowledge and the business acumen to make your business a success.

Each Ecovis consultant has instant access to our many specialist departments as well as to national and international colleagues with well-developed skill sets in different fields and jurisdictions.

Profit from the wealth of knowledge your personal Ecovis consultant has to draw from

Our Business in Denmark

ECOVIS Danmark, CPA firm CVR no 28939523 carries on business from two offices Store Kongensgade 36, DK-1264 Copenhagen K, and Nørregade 6 B, DK-4100 Ringsted.

Company owned by Kurt Bülow, Preben Pedersen, and Bo Langtoft, who are all State Authorised Public Accountants.

Our Business in Denmark (continued)

Profile (continued)


The company have about 30 employees: State Authorized Public Accountants, accountants, persons with Graduate Diploma in Business Administration (HD), MSc degrees in Business Administration and Auditing, and accounting consultants. We serve a wide range of business in the industrial sector as well in the service sector.

Our service lines are:Audit, Accounting Taxes, all kinds nearly.

Legal services we provide via a separate Law firm Ecovis Legal Denmark

We serve foreign companies in Denmark, just as our Ecovis partners abroad help our client companies.

You will find more information of our company at www.ecovis.dk

For further information contact Kurt Bülow, [email protected] direct phone no. +45 5766 2462

On the following pages

Some more details and Examples


page

Labour costs 18

Danish Labour Market 19

Foreigners working in Denmark benefit from the Danish welfare system 20

Example of a payslip with hourly pay 21

Total cost for employer, example with 140 DKK per hour 22

Example of a Payroll Proposal 23

Expat scheme 27% 26

Labour costs

18

� There is no minimum wage set by law, instead the wage and salary are set as part of the regular negotiations between the employers and labour unions.

� The level of salary and wage in Denmark may seem high compared to other European countries. The competitiveness of Danish labour costs is, however, visible when considering both salary and non-salary related costs, as employers have a lower aggregated cost burden in terms of social security, labour taxes and more. This makes the overall gross labour cost very competitive without compromising employees� rights and benefits. As such, Denmark offers a high level of social security for people who get ill or lose their job, but the employer�s direct contribution to social security is minimal.


(flexibility and security)

Danish Labour Market � flexi security

19

�

� An integrated approach of both enhancing, at the same time, flexibility and security in the labour market. The approach operates through a combination of personal taxation, unemployment benefits and collective agreements. It reconciles employers' need for a flexible workforce with workers' need for security and simultaneously promotes stability and adaptability of employees and enterprises.

� The flexibility in adapting your business is unique to the Danish labour market model, where you combine the flexibility of hiring and firing with a safety net for employees. This enables businesses to pursue opportunities and ensures the right talent is there to deliver, while mitigating risk for both parties.

� The combined approach offers a high flexibility in hiring and firing practices, which is unique in Europe. Provided a valid reason exists and legal notice is given, the employer is entitled to dismiss any employee at any time, without incurring costs, making it easier for an individual business to adjust the size of its workforce in Denmark.

� Around 2/3 of Danish workers are union members. Strikes are uncommon in Denmark as the participants of a collective agreement is to observe peace for the duration of the agreement.


Foreigners working in Denmark benefit from

the Danish welfare system

20

� Most foreign nationals who are working in Denmark are covered by the social security system from the time they take up employment.

� Denmark has a very extensive social security system, covering health insurance, sickness benefits, maternity and paternity leave, pensions, industrial injury insurance and family benefits. The system is mainly financed by income taxes.

� For some benefits there is a minimum period of residence requirement.

� EU/EEA nationals, and other foreign nationals whose countries� have a social security agreement with Denmark, can opt to remain covered by the social security system in their home country, if they are living and working in Denmark on a temporary basis.



Example of a payslip with 140 DKK per hour (Currency �)

Calculation of Wages and taxes 2019 for workers in Denmark (EXAMPLE)

Period Example Hourly pay Hours in Monthly CurrencyName month 7,45

Salary, ( insert hourly pay and total hours for the month) 140 165 23.100 3.101 Addidion for owertime up to 3 hours pr day 50% 4,7 329 44 Addidion for owertime more than 3 hours pr day 100% - - ATP, or an A1, If an A1 ut 1 in the red field -94,65 -13 Pension, employees part 4% -920 -124

22.414 3.009 -

Arbejdsmarkedsbidrag (Gross Tax) 8% 1.793 241 Taxable income 20.621 2.768

- Taxfree part of income, per year 2019 66.157 5.513 - Deduction for travel, food and accomodation - Only if noting is paid as allowances, per year max 2017 DKK 26.800 - - -

15.108 - sum of taxes to state and municipal tax-church 35% 5.239 703 Tax free allowances: Days DKK per day - Food maximum DKK 509 per working day 0 509 - - Accommodation maximum DKK 219 per working day 219 - -

- - Net to Worker 15.382 2.065

Holiday pay 12,50% 2.888 388 Weekdays and public holidays and other paid off days 9,6% 9,60% 2.218 298 Pension 4% -204 -27 Arbejdsmarkedsbidrag, gross tax 8% -392 -53

4.509 605 Taxes 35% -1.563 -210 Net paid in to Holiday Fund 2.945 395

- -

Total income exclusive tax free allowances 27.315 3.666 total tax 8.988 1.206 Effective tax rate 33,1% 33,1%Total income inclusive tax free allowances pension deducted 27.315 3.666 Effective tax rate on total income inclusive tax fre allowances 33,1% 33,1%


Total cost for employer, example with 140 DKK per hourwithout any tax-free allowances (Currency � other figures DKK)

Total costs for employer currency

Salary 23.429 3.145 Holliday pay 2.888 388 Weekdays/public holidays 2.218 298 Pension 2.472 332 Tax free allowances - -

31.006 4.162 Other social costs 653 88 (33% of DKK 1.957,85) - Healt payment 0,15 % 43 6 Mandatory insurance 909 122 Total cost per month 32.611 4.377


Example of a Payroll Proposal (with 25 employees)

Variable/Fixed Base of the fee calculationNo of units Unit Price EUR Price per month Anual costs

START COSTS - ONE TIME FEE

Create Company profi le in payrol l s ys tem 1 335,00 335,00Nets agreement for automatic payments of net sa lary, tax, pens ion etc 1 135,00 135,00

0,000,00

Create employees in payrol l sys tem

Fixed per employee

Per employee25 20,00 500,00

Year-to-date figures from previous payrol l sys tem

Variable Per hour4 110,00 440,00

Taking over from other payrol l provider

Variable Per hour0 110,00 0,000 0,00 0,00

Acces s to SKAT, e-boks etc 2 85,00 170,00Apply for Socia l Securi tty numbers and tax cards 0 85,00 0,00Customize/des ign fi le for payrol l input 0 110,00 0,00

0 0,00 0,00

START COSTS TOTAL 1.580,00

Payrol l s tart fee Fixed

Other s tart-up costs Variable

Enter data/employees to payrol l s ys tem

Hours spent


Example of a Payroll Proposal (continued)

MONTHLY SERVICES

Number of payrolls per year 25,00

Fee per payrol l run 1 35,00 35,00 420,00Pay s l ips 25 20,00 500,00 6.000,00Starters 0 20,00 0,00 0,00Leavers 0 20,00 0,00 0,00

0 0,00 0,00 0,000 0,00 0,00 0,00

Booki ng report (i f not s tanda rd) 0 85,00 0,00 0,00Accrued vacation report 1 85,00 85,00 1.020,00Payrol l ana l ys is 0 110,00 0,00 0,00Other payrol l -related as s is tance 0 85,00 0,00 0,00Other payrol l -related as s is tance 0 110,00 0,00 0,00

Ass is tance wi th contracts and agreements 0 110,00 0,00 0,00Refunds regarding materni ty leave 0 85,00 0,00 0,00Refunds regarding s i ck leave 0 85,00 0,00 0,00Reports to authouri ties/s tati s tics 0 85,00 0,00 0,00Other HR-related as s is tance 0 85,00 0,00 0,00Other HR-related as s is tance 0 110,00 0,00 0,00

Support to audi tors 4 110,00 440,00Year-end reconci l i a tions 4 85,00 340,00Reminders / not adequa te input 0 85,00 0,00

0 0,00 0,00

MONTHLY SERVICES TOTAL 620,00 8.220,00

Fixed per employee

Number of monthly pa ys l ips , new employees ,

terminati onsMonthly Payrol l Services

Ad-Hoc Varia ble Hours spent

Monthl y HR Services Varia ble Hours s pent

Monthl y payrol l reports / Other payrol l -related

as s is tanceVaria ble Hours spent


Example of a Payroll Proposal (continued)


Expat scheme 27%

Special rules favouring researchers and key employees recruited abroad

As an expert or a researcher, you only have to pay a gross tax of 27% for 84 month your earned income instead of the ordinary income tax. However, you lose your right to allowances.

As an expert or researcher, it is possible to be allowed to pay a gross tax of 27% of the salary income instead of the regular income tax, for the first seven years (84 months) of employment. In return, one loses any rights to deductions. (Persons liable to tax under the 27% tax scheme must also pay social security contributions amounting to 8%. This means that employees covered by the scheme may have a total minimum tax of 32.84 %).

The employer may be Danish or a foreign company or institution with business premises in Denmark, or a foreign company with operations in Denmark. A few general conditions must be fulfilled in order for the rule to apply.


Expat scheme 27% (continued)

The requirements for when the conditions are met may vary depending on whether:One is hired as a researcher with research qualifications, or the job is genuine research work.

One is recruited to a specialized or managerial position (key employees) Condition.One must become fully liable to taxation in Denmark at the commencement of employment. If one is hired to do research work, this requirement no longer applies. The scheme may also be utilized by persons of limited tax liability on certain conditions.One may not have had full or limited tax liability in Denmark on salary income or income from businesses for up to 10 years before. Nor may one have been stationed abroad by the employing company.

The monthly gross salary must be at least 68,200 DKK (2020). To this must be added labour market contribution and the Danish Labour Market Supplementary Pension or any mandatory foreign social security contributions. The income requirement does not, however, apply to researchers employed to carry out research work, and whose qualifications a public research institution or the research councils accept.One is not permitted to have had a controlling interest in the company through co-ownership for five years prior to employment. Managers can be covered by the scheme, though.


Expert Tax Scheme 27%/32,84% (continued)

Comparing special tax scheme with normal tax scheme Special Tax scheme Normal Tax Scheme

TAX Per month Per month Per Currency Per Currency Difference% minimum minimum currency Year Rate Year Rate in

68.200kr. 9.167 DKK 7,44 DKK 7,44 CurrencySalary 111.600 15.000 1.339.200 180.000 1.339.200 180.000 - ATP life long pension -95 -1.136 -153 -1.136 -153 -

Pension own payment 0% - 15.000 - - - - -

111.505 1.338.064 179.847 1.338.064 179.847 - Gross tax 8% -8.920 -107.045 -14.388 -107.045 -14.388 -

102.585 INPUT 1.231.019 165.460 1.231.019 165.460 - Tax according to special tax scheme/normal tax 27% -27.698 Currency per -332.375 -44.674 -524.910 -70.552 -25.878 Net pay 74.887 Month 898.644 120.785 706.109 94.907 -25.878

minimum as - - - in Blue field above - - -

Total salary and benefits less pension 111.505 with excange- 1.338.064 179.847 1.338.064 179.847 - Total tax 32,84% -36.618 rate -439.420 -59.062 -631.955 -84.940 -25.878 Net pay 74.887 7,44 898.644 120.785 706.109 94.907 -25.878

Total tax % 32,84% 32,84% 47,23% 47,23% 14,39%

This is only an example and there might according to the agreementbetweeen the Union and Employers organasation be a lot of other things to take into considarations, which only can beobserved by reading the agreement, as well as other factors influence thecosts in relation to have employees


Disclaimer

The information contained in this site/document is for general guidance on matters of interest only for the personal use of the reader. The impact of laws can vary widely based on the facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this site/document. Accordingly, the information on this site/document is provided with the understanding that the Web site / document in it selves are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult an Ecovis professional.While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Ecovis is not responsible for any errors or omissions, or for the results obtained from the use of this information.

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