Tax cases · 1 May 2026
Labour market contribution assessment of DKK 750,100 cancelled
The matter was conducted by attorney Hussain Ali Alhaidary. Hussain Ali Alhaidary
We successfully represented a client in a Danish tax appeal concerning labour market contributions on bank deposits. The DKK 750,100 assessment was cancelled.
We assisted a client in an unpublished appeal case where the Danish Tax Agency first increased the client's taxable income and subsequently decided that the client should also pay labour market contributions on the increase.
The Tax Agency referred to sections 1 and 2 of the Danish Labour Market Contributions Act and assumed that the deposits in question to the client's bank account had to be regarded as remuneration for personal work.
We disagreed.
Deposits are not necessarily remuneration for work
Under section 2(1) of the Labour Market Contributions Act, the contribution base includes, among other things, remuneration in money or in kind that can be attributed to personal work in an employment relationship.
The decisive question in the case was therefore whether the amounts deposited in the client's bank account could in fact be regarded as payment for work or a service performed by the client.
We argued that the concept of remuneration presupposes consideration. In other words, there must be payment as remuneration for work or a service before the amount can form the basis for a labour market contribution.
In our view, the Tax Agency had not sufficiently documented or made probable that the specific deposits were payment for work performed by the client.
The client succeeded
The appeals authority agreed that it had not been made probable that the deposits to the client's bank account had been received as payment for work or a service.
There was therefore no basis for imposing labour market contributions on the increase.
The Tax Agency's decision on a total tax assessment of DKK 750,100 was therefore cancelled.
What does the decision show?
The decision illustrates that it is not sufficient simply to establish that a person has received money in their bank account.
If the Tax Agency wishes to collect labour market contributions, there must be a sufficient basis for establishing that the payment has the character of remuneration for personal work or a specific service.
It is therefore important to keep income taxation and the question of labour market contributions separate. An increase in taxable income does not necessarily automatically mean that labour market contributions must also be paid.
Has the Tax Agency demanded labour market contributions on your income?
We assist in tax cases where the Tax Agency, among other things, increases income on the basis of bank deposits, transfers or other payments and at the same time demands labour market contributions.
If you have received a proposal or a decision from the Tax Agency that you believe is based on an incorrect factual or legal basis, you are welcome to contact us for a non-binding assessment of the case.
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