Withholding Tax (Kildeskat) on Payments to Foreign Influencers: When Does a Danish Brand Have to Withhold?

Denmark generally imposes a 22% withholding tax on royalty payments sent out of the country (kildeskatteloven § 65 C), and since 1 July 2024 every royalty payment to a nonresident must be reported to the Danish tax authority, Skattestyrelsen — regardless of whether the recipient is actually taxable on the amount. The question that actually matters for an ordinary influencer fee is rarely the rate itself, but whether the payment is a "royalty" in the legal sense at all, or simply an ordinary payment for a service rendered. This is general guidance, not tax advice for your specific deal — get the specific characterization confirmed by your accountant before sending a large or recurring payment to a foreign creator.

Why this question comes up at all

How to Pay International Influencers walks through three separate checks for a cross-border payment: transfer, invoicing and VAT/tax. That article covers VAT (reverse charge) and US withholding tax on income earned inside the US. It doesn't cover the reverse question this article is about: can Denmark itself, as the source country, claim withholding tax on a payment your brand sends out of Denmark to a foreign influencer? That's a Danish rule that potentially applies to you as the payer, independent of whatever rules apply in the influencer's own home country.

Kildeskatteloven § 65 C: the rule and the rate

Under kildeskatteloven § 65 C, anyone with tax domicile in Denmark — individuals, companies, associations, foundations and institutions — who pays or credits a royalty to a person or company without Danish tax liability must generally withhold 22% of the full royalty amount. The obligation to withhold sits with you as the payer, not the recipient. The form of payment doesn't matter — both a recurring payment and a one-off lump sum are covered on the same terms.

What counts as a "royalty" under Danish tax law — and what doesn't

The definition in § 65 C covers payment for the use of, or the right to use, a patent, trademark, design or model, drawing, secret formula or manufacturing method, or for information concerning industrial, commercial or scientific experience (know-how). Skattestyrelsen's own legal guidance draws a clear line the other way too: ordinary technical assistance — where one party performs work using its professional expertise for the other — falls outside the royalty definition, even where a contract combines know-how and technical assistance in the same deal; in that case the payment must be apportioned, and only the know-how portion counts as a royalty.

The core distinction, then: a royalty pays for the right to use something; an ordinary service fee pays for work performed. A perfectly ordinary influencer fee for producing and sharing a sponsored post looks, on its face, far closer to the second category — work performed — than the first.

Is an ordinary influencer fee a royalty at all? The open question

This research found no Danish source — not Skattestyrelsen, the courts, or a Danish tax advisor — that directly addresses whether an ordinary influencer collaboration fee is a royalty under § 65 C. That isn't the same as the question having been settled either way; it hasn't been addressed at all. This article therefore doesn't guess at an answer. Instead it lays out what the general royalty-vs-service distinction above suggests is likely to matter, and recommends getting the specific deal assessed by an accountant before relying on either answer.

A plain fee for producing and sharing content — with no further usage rights granted to the brand — looks, under the distinction above, like ordinary technical assistance/service income, not a royalty. The picture gets murkier when the deal also gives the brand an ongoing right to reuse the influencer's name, image or "personal brand" in its own marketing beyond the original post — a whitelisting arrangement or an extended usage-rights clause, for example (see what to put in an influencer contract for what that kind of clause typically covers). An ongoing licence of that kind structurally resembles "the right to use" something closer to a trademark than ordinary work performed — but that's an analogy, not a Danish legal authority, and it's exactly the kind of assessment an accountant should make on the specific contract.

An international parallel (not Danish law) — for illustration only

This distinction between paying for a service and paying for a right to a name or image isn't unique to Denmark. US tax law has repeatedly had to draw exactly this line in professional athletes' endorsement deals: in golfer Retief Goosen's case, his income from TaylorMade was split 50/50 between personal services (appearances, product testing) and royalty income for the right to use his name, image and signature — each half taxed under its own rules. In a similar case, 65% of golfer Sergio Garcia's income from the same kind of deal was recognised as royalty income for use of his image. These are US cases under US law and say nothing directly about Danish kildeskatteloven § 65 C — they simply illustrate that other tax systems have had to grapple with exactly the same underlying question, and that in practice it has turned on how the contract itself describes and, where relevant, splits the payment between service and right.

Can the rate be reduced? Tax treaties and the EU Interest and Royalty Directive

The 22% is only the starting point. Skattestyrelsen can authorise not withholding royalty tax at all, or withholding at a lower rate, where an applicable double tax treaty between Denmark and the recipient's home country provides for it — several of Denmark's treaties reduce the source country's right to tax royalties to 0%, while others only reduce the rate partially. The authorisation (documented via Skattestyrelsen's own form 06.015, a certificate of tax residence and status) needs to be in place at the time of payment — if it isn't yet, you must generally withhold the full 22%, after which the recipient can apply to Skattestyrelsen for a refund of the excess.

The EU Interest and Royalty Directive can also exempt a payment from withholding tax, but only where the payer and recipient are "associated companies" as the directive defines it — typically a parent/subsidiary or sister-company group relationship. For an ordinary payment to a single, independent influencer that condition normally isn't met, so the directive is rarely relevant here — a double tax treaty is the realistic route to a reduced rate.

The reporting duty since 1 July 2024

Correcting a common assumption: the reporting obligation for royalty payments abroad took effect on 1 July 2024 — not 2026, a date that circulates in some secondary sources. Since then, every Danish payer must report the royalty payment to Skattestyrelsen, regardless of whether the recipient is exempt from Danish tax on the amount, and regardless of whether payer and recipient are associated parties. The only exception is where the recipient is exempt under the EU Interest and Royalty Directive.

Decision framework

• IF the payment is a plain fee for content produced and shared, with no further name/image licence THEN under the distinction above it looks like a service fee, not a royalty — but get it confirmed by your accountant if the amount is large or recurring.
• IF the deal also grants you an ongoing right to reuse the influencer's name, image or content in your own marketing beyond the original post THEN the royalty question is genuinely open and should be assessed on the specific facts before the payment is sent.
• IF you conclude it is a royalty, and the recipient lives in a country with a Danish double tax treaty THEN check the treaty's specific rate and request proof of tax residence before paying.
• IF you withhold, or decide not to THEN remember the reporting duty applies either way, unless the EU Interest and Royalty Directive specifically exempts the payment.

Worked example (hypothetical)

The figures below are a made-up example to illustrate the calculation — not a real customer case, and not a statement that any specific influencer fee is actually a royalty.

Assume a Danish brand concludes, after advice from its accountant, that a DKK 20,000 payment to an influencer in a country with no Danish double tax treaty is genuinely a royalty under § 65 C, because the deal includes an ongoing licence to reuse the influencer's image in the brand's own advertising.

Without treaty relief: Withholding tax = DKK 20,000 × 22% = DKK 4,400. The brand withholds and remits the DKK 4,400 to Skattestyrelsen and pays the remainder, 20,000 − 4,400 = DKK 15,600, to the influencer.

With a treaty that reduces the rate to 0%, and valid proof of tax residence in place at the time of payment: nothing is withheld, and the influencer receives the full DKK 20,000. The payment still has to be reported to Skattestyrelsen, unless the EU Interest and Royalty Directive specifically exempts it.

If the payment is instead assessed as not being a royalty at all — just an ordinary fee for work performed — § 65 C doesn't apply at all, and the full DKK 20,000 is paid with no withholding, regardless of whether a treaty exists. That's exactly the assessment this article recommends getting confirmed before the money is sent.

Common mistakes

• Assuming every payment to a foreign influencer is a royalty — most ordinary content fees look, under the distinction above, like a service fee instead.
• Assuming the opposite — that no influencer payment can ever be a royalty — a deal with an ongoing name/image licence genuinely puts the question back in play.
• Believing the reporting duty only applies if the amount is actually taxable — since 1 July 2024 it applies regardless of whether the recipient is exempt.
• Waiting to request proof of tax residence until after the payment is sent — without it in hand, you must generally withhold the full 22%.
• Confusing this article's topic with US withholding tax — that's a separate question, covered in How to Pay International Influencers.

Make Influence's perspective

This is Make Influence's own operational experience, not a general rule: the large majority of international collaborations we see are ordinary fees for content produced and shared, with no separate, ongoing licence to name or image — so the royalty question rarely comes up in practice. It's when a deal moves toward a genuine ambassador relationship, with a broader, open-ended right to reuse the influencer's name and image in your own marketing, that it's worth having the question assessed on the specific facts before the contract is signed — not after.

FAQ

Do we always have to withhold 22% tax when paying a foreign influencer?

No. The rule only applies if the payment, on a specific assessment, is a royalty under kildeskatteloven § 65 C — an ordinary fee for content work usually isn't. Get the assessment confirmed by your accountant.

When did the reporting duty for royalty payments take effect?

1 July 2024 — not 2026. Since then, every royalty payment to a nonresident must be reported to Skattestyrelsen, regardless of whether the amount is actually taxable.

Can we avoid withholding tax using the EU Interest and Royalty Directive?

Only if you and the recipient are associated companies under the directive's definition — typically a group relationship. For a payment to an independent, standalone influencer that usually doesn't apply; a double tax treaty is the more realistic route to a reduced rate.

What happens if we don't have the influencer's proof of tax residence when we need to pay?

You must generally withhold the full 22%, even if a treaty would otherwise have entitled the payment to a lower rate. The recipient can then apply to Skattestyrelsen afterward to reclaim the amount over-withheld.

Does this article also apply to payments to a foreign influencer based in the US?

This article covers Danish withholding tax on payments sent out of Denmark. The question of US withholding tax on payments going the other way — or to a US-based influencer working for a Danish brand — is covered in How to Pay International Influencers.

Is this the same question as VAT on a foreign influencer's invoice?

No, they're two entirely separate questions with different rules. VAT is decided by where the buyer (your business) is established, and is covered in VAT and tax deductions for buying influencer marketing in Denmark. Withholding tax is decided by whether the payment is a royalty under Danish tax law, independent of the VAT treatment.

Does it change anything for withholding tax if we hire the creator full-time instead, e.g. via an Employer of Record?

Yes — if the creator genuinely becomes an employee, the payment is salary (A-income), and the royalty rule in § 65 C is no longer relevant at all; the ordinary A-tax withholding rules for paying an employee abroad apply instead. See Employer of Record vs direct contract for the three legal routes to hiring an international creator, and when a collaboration has genuinely shifted from a freelance fee to employment.