Effective Dates: 10/18/2022 - Present Previous | Next

TN 21 (10-22)

RS 02002.135 Self-Employment Rule Under the Agreement with Denmark

A. Introduction

Generally, a work activity that is considered to be self-employment under U.S. Social Security law is also considered to be self-employment under Danish law. In certain cases, however, a person may be engaged in an activity that is considered self-employment by one country and employment by the other country. For example, under U.S. law, ordained ministers and members of the board of directors of a corporation are considered self-employed. Under Danish law they may be considered employees. The following subsections explain how coverage is determined in each situation.

B. Policy on the self-employment rule to apply

1. Activity is self-employment in both countries

If the work activity is considered self-employment by both countries, the worker is covered only by the country of which the worker is a resident.

2. Activity is self-employment in only one country

If the work activity is considered self-employment under the laws of one country and employment under the laws of the other country, the worker’s coverage is determined as follows:

  • •

    A worker who is a resident of the country that considers the activity to be self-employment is covered under the laws of that country.

  • •

    A worker who is not a resident of the country that considers the activity to be self-employment, the worker coverage is determined under the laws of the other country.

C. Process documenting exemption from paying U.S. Social Security self-employment taxes

A self-employed U.S. citizen who is subject only to Danish law under the agreement and is exempt from paying Social Security self-employment (SECA) tax must still file a U.S. tax return every year. When preparing the income tax return, the worker should show that the earnings are exempt under the agreement and attach a photocopy of the certificate of coverage issued by the Danish authorities as proof of the exemption.

D. Reference

RS 02002.145, Certificates of Coverage under the Agreement with Denmark

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0302002135
RS 02002.135 - Self-Employment Rule Under the Agreement with Denmark - 10/18/2022
Batch run: 10/18/2022
Rev:10/18/2022