Copenhagen
DKK (kr)
Yes
PayPal, Bank Transfer
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If the influencer is acting as an individual without any registered activity, it is essential to be aware of applicable rules and regulations, as you may have additional responsibilities towards the individual. It is important to understand what legal obligations apply to you. You may for example have withholding responsibilities or be required to pay social costs.
A person providing a service to someone without actually registering an activity. It could for example be someone helping the neighbour with their math exercises before a test for a small fee.
Yes, but conditions may apply. If the activity is not viewed as a hobby or if certain thresholds are met, the influencer should register their activity as a sole trader or company.
Receiving compensation as an individual can be tricky and may sometimes raise concerns related to employment laws and taxation rules. Therefore, it is quite common for influencers to register their activity as sole traders in their country of work. In fact, most countries have simplified systems allowing persons to register their activity in a quick and easy way. This allows influencers to invoice their clients and pay their taxes in a more streamlined way.
A sole trader is typically a self-employed person who owns and runs their own business as an individual. Sole traders usually benefit from a simplified system designed to make it easier to start a business.
In Denmark, sole traders are called “enkeltmandsvirksomhed”. Danish sole traders benefit from a unique, simplified system designed to make it easier to start a business. The sole traders are able to issue invoices and sell goods and services. They pay their own social fees and taxes.
In Denmark, self-employed have something called “B-income”. B-income is on income which for instance tax has not been withheld before you get paid. You as a self-employed need to declare and pay taxes. (forskudsopgørelse). Read more about this below under Paying tax on regular B-income.
You may read more about the registration process and the “enkeltmandsvirksomhed” status and B-income on the following websites:
Yes.
If the influencer is popular, it is not uncommon that they have a registered company and a whole team working with them (billing, project management, technical team, ...).
A company is typically a legal entity formed by a group of individuals to operate a business enterprise. It may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction.
Yes.
Notwithstanding the above, it may be possible to receive compensation for influencer work without registering as a sole trader or company. Many countries have rules allowing individuals to receive compensation if certain conditions are met. However, it can be tricky sometimes to know if the activity can be classified as a hobby or not, therefore, when in doubt, it is almost always preferred to register as a sole trader to ensure compliance with applicable laws and regulations.
In Denmark, you need to be clear about how you classify your businesses for tax purposes. Your business can be non-commercial when its primary aim is not to make a profit but to pursue a hobby such as painting or horse riding. In case you want to read examples of how hobbies work in Denmark you can find more information here. However, if you are unsure how you should classify, what taxes and duties you have, you can apply for a binding ruling from the tax authority here. Generally, it is better to register your activity if you are unsure in case some conditions may apply and the activity is more habitual and constant. If the influencer is planning to do influencer marketing on a regular basis or is investing time and money in the activity, it may be wise to register as a sole trader as soon as possible.
In order to assess your responsibilities towards the influencer, it is necessary to define your relationship and follow a proper due diligence process catered to the status of the influencer and their country of activity. This may include requesting information about their name, TIN number, age, and more.
It may also be relevant to do some research about the influencer's followers in order to verify that their followers fit the kind of content or product you would like to advertise. This is especially important if the followers are young (e.g. it may not be appropriate to advertise alcohol to underage followers).
The most common payment method in Denmark is Bank Transfer, followed by MobilePay and PayPal
Danish sole traders may issue invoices to clients in Denmark and in other countries.Services supplied to a business having its business address or a fixed establishment in Denmark to which the services are supplied are subject to Danish VAT regardless of where the supplier is established.
However, when invoicing to clients outside the EU, the reverse charge method applies. Reverse charge means that the supplier may issue an invoice without VAT as the buyer is obliged to calculate and report VAT in his own VAT return and pay the VAT amount to the local tax authorities. You can read more general information about reverse charge here.
In Denmark, businesses may outsource invoicing operations to a third party or to the customer if certain circumstances are met. You may use self-billing or “selvfakturering” in Danish if the parties have agreed to use self-billing prior to issuing the invoice. The agreement should preferably be in writing and specify the terms applicable to the self-billing invoice.
As a general rule, gifts are considered to be a form of compensation, and influencers should therefore always report the value of gifts, free travel, and vouchers to their tax authorities. The taxable value is usually based on the commercial value of the gift, travel, or voucher.
It is not uncommon for companies to be legally required to report to tax agencies when they pay out compensation to an influencer. Influencer partnerships are quite different from regular partnerships, compensation may not only include monetary compensation but also free gifts, vouchers, and travel. In some countries, all types of compensation sent for “payment” to the influencer should be reported. Therefore, it may be relevant to verify your reporting responsibilities on that matter.
DAC7 is a directive on cooperation between different EU member states on gathering and reporting data about natural and legal entities and their earnings through digital platforms and marketplaces. Certain digital platforms are responsible for collecting, verifying, updating, and reporting data about the sellers on the platform and their earnings. Generally, if you are a platform operator, conducting business in the European Union and making available all or part of your platform to sellers, you may have reporting obligations under DAC7. The digital platform has to submit its first report by the 31st of January 2024. Bear in mind that different EU countries may implement the Directive slightly differently.
As mentioned above, it is not uncommon for companies to be legally required to report to tax agencies when they pay out compensation to an influencer. This obligation may also be applicable if you are working with an influencer from another country. Many countries sign bilateral agreements in which they agree to exchange income statements with each other. This allows tax agencies around the world to have a better overview of the compensation paid out to the people conducting business in their country and better control over who should pay taxes or not. The exchange of income statements is especially relevant when paying out compensation to individuals without a registered activity. It is therefore important to verify your reporting obligations in your country.
Before drafting an agreement with an influencer, it is important to consider if the person has a registered activity as an influencer or a company. If the influencer is acting as an individual without any registered activity, it is essential to be aware of applicable rules and regulations, as you may have additional responsibilities towards the individual. It is important to understand what legal obligations apply to you. It is important to be fully aware of all the responsibilities before drafting any agreement with an influencer as you may be able, depending on the applicable laws and regulations, to put some of the responsibilities onto the influencer if it is clearly stated in the agreement. It is also important to consider any potential liabilities arising from the agreement. As such, the responsibility of each party should be clearly described in the agreement and preferably regulate topics such as the payment of indirect and direct taxes, reporting to tax authorities, or even social costs.
In most countries, influencer marketing is already regulated by national laws such as consumer protection and marketing laws or specific guidelines.
Considering influencers can reach consumers globally, examining legal implications in various countries is important. Violating the rules can lead to penalties, fines, and legal fees.
It's important to note that there are topics that are usually more strongly regulated within influencer marketing. These commonly include:
Work on this is progressing quickly both on a national and a global level. It would therefore be wise to keep yourself updated on new laws and guidelines being issued on the topic.
Authorities are increasingly providing interesting data on the topic. The European Consumer Center France offers a list of influencers' obligations and responsibilities in Europe, providing interesting insights into certain EU countries.
Similar to other European countries, Denmark also has a marketing law about hidden advertising and hidden paid partnerships. In European countries, we can also notice some authorities take further measures to examine the influencer marketing phenomenon by issuing special guidelines for influencers to follow in case they are advertising products on social media. Not following the rules in Denmark may result in high fines.
In April 2023, an influencer with a large number of followers was fined 50,000 DKK for failure to disclose paid partnerships and hidden advertising on both Facebook and Instagram. In this case, the DCO specifically mentioned that since the influencer advertised to consumers in other EU countries, the convictions may fall harder. The ban on hidden advertising applies throughout the European Union.
The Danish Consumer Ombudsman (DCO) has published a Danish guide on their website aiming to help influencers understand how to advertise products on social media. You can find and download the guide here.
If you are looking to collaborate with independent workers, it is essential to treat them as such. Influencers working independently should be treated differently from employees. It is crucial to provide them with creative and personal freedom, allowing them, for example, to choose and determine their activities and working hours. To prevent a relationship that could be seen as an employment relationship, it is imperative to draft a clear agreement between the two parties. If the relationship is too close to an employment relationship, it may be viewed as false self-employment. This may come with legal implications for the brand. Without an unambiguous agreement, a clear distinction is not always easy; both influencers and those who use them are often unaware of how the relationship can be viewed by the authorities.
As a rule of thumb, the more instructions you give regarding the services to be performed and the more the person is bound to your organization, the more likely it is that an employment relationship exists. To ensure that your relationship with the influencer is as unambiguous as possible, it is important to make sure that the agreement that is established is fair and offers them the autonomy to choose their activities and working hours. Also, the relationship should be independent in facts not only on paper. This should allow for a successful collaboration. In the case of false self-employment, the brand or agency may be responsible for paying employer fees and social costs for the influencer.
An Agreement can take many forms and does not necessarily have to be in writing. However, it’s usually recommended to sign a written Agreement with the digital creator before they start to work on a project. We recommend having a legal professional review the agreement before it's signed, to ensure that it covers all the necessary legal aspects relevant to the relationship at hand. It may be relevant to define the following points in the agreement:
1. Define Compensation Structure and Amount
Begin by specifying the type and amount of compensation the influencer will receive for their services. This can be a flat fee, commission-based, or a combination of both. Be transparent about the compensation structure and ensure that the influencer understands whether they are considered an employee or an independent contractor, as this has tax implications.
2. Outline Payment Schedule and Currency
Establish a clear payment schedule that details whether the influencer will receive a one-time payment or multiple installments. Also, specify the currency in which payments will be made, and discuss potential fluctuations in exchange rates to avoid confusion or disagreements.
3. Specify Payment Terms for Content Creation and Sharing
One important consideration is whether payment should only be made upon delivery of the post or if there should be two separate fees, one for creating the content and another for sharing it upon approval by the Brand. Clearly state these terms in your agreement to ensure both parties understand when and how payments will be made for each aspect of the influencer's work.
4. Detail Payment Methods and Third-Party Involvement
Outline the method of payment, whether it's PayPal, wire transfer, or through a third party. If you're using a third-party service provider, such as Gigapay, to handle payouts and reporting, include this information in the agreement. This helps set expectations and ensures the influencer knows who will send the payment and when to expect it.
Want to know more about influencer partnership agreements? Use this guide to ensure your agreements cover all essential aspects and foster long-lasting, mutually beneficial relationships with your influencers.
With Gigapay you can start working with creator in a breeze. Forget about complicated KYC process and a long chain of approval. Simply upload your spreadsheets with the emails of who you would like to pay and we handle everything for you. We tank care of collecting all the necessary legal information in order for you to pay influencers.
With Gigapay you can start working with creator in a breeze. Forget about complicated KYC process and a long chain of approval. Simply upload your spreadsheets with the emails of who you would like to pay and we handle everything for you. We tank care of collecting all the necessary legal information in order for you to pay influencers.
With Gigapay you can start working with creator in a breeze. Forget about complicated KYC process and a long chain of approval. Simply upload your spreadsheets with the emails of who you would like to pay and we handle everything for you. We tank care of collecting all the necessary legal information in order for you to pay influencers.
With Gigapay you can start working with creator in a breeze. Forget about complicated KYC process and a long chain of approval. Simply upload your spreadsheets with the emails of who you would like to pay and we handle everything for you. We tank care of collecting all the necessary legal information in order for you to pay influencers.
Note: The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only.
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Explore our guides detailing the dos and don'ts of influencer regulations. Ensure your influencer partnerships comply with the latest international regulations.
