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The 25% tax is collected by the employer or his agent, and the tax must be withheld in connection with the payment or crediting of the remuneration. The tax must be settled with the tax authorities by the employer.

Since 1 January 2004 it has been easier to state and pay withheld 25% tax on income taxed at source, AM contributions and SP contributions for enterprises with employees comprised by Section 48E of the Act on Taxation at the Source. Statement as well as payment of 25% tax on income and contributions is since then to be made on the same giro card as that for employees who are normally taxed.

Furthermore, Section 48 E income, with 25% tax on income and contributions, is to be reported on the ordinary withholding statement (03.400) to be submitted by 20 January after the end of the income year. Please note that a code must be given in space 68. The code for Section 48 E employees is 48. The withholding statements may also be submitted through a pay transfer agency.

The accounts with receipts taxed in accordance with Section 48 E of the Act on Taxation at the Source may be integrated with the enterprise's ordinary payroll accounts. In this connection it is useful to prepare the accounts in such a way that information liable to be reported can be easily checked off.

If a Section 48 E employee changes to ordinary taxation during an income year, two withholding statements must be submitted. Earned income, tax on income, etc. taxed according to the special rules in Section 48 E are reported in a separate withholding statement with code 48 in space 68.

Concerning submission of withholding statements, you can also see guide to enterprises about withholding statement 2006 (E 01 Oplysningssedlen 2006), which will be published by the end of 2006. Until then, you can get to the 2005-version by clicking on the link. The guide is only available in Danish.