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Denmark Announces Tax Cut Package

by Ulrika Lomas,, Brussels

04 September 2017

The Danish Government has announced a substantial package of tax cuts worth DKK23bn (USD3.7bn) entailing reductions in tax on work, car ownership, and saving for a pension.

Under the plans, a new, targeted job allowance will be introduced, which will give Danes with relatively low incomes a tax rebate of up to DKK4,500 per year. In addition, the ceiling on the employment deduction will be abolished under the tax plans, announced on August 29. This would mean a reduction in marginal tax of about 2.7 percent for "a wide group of employees," the Government said.

The Government also proposes to reduce the vehicle registration tax, a measure it said would lower the cost of car ownership by around DKK15,000.

In addition, the Government plans to introduce a new tax deduction for contributions to pension schemes to make saving for retirement more attractive.

Commenting on the proposals, Minister for Economic and Home Affairs Simon Emil Ammitzboll said: "My basic idea is that citizens should retain and even prioritize a much larger portion of the money they earn. I am therefore incredibly pleased that our ideas increase the financial gain for those who take a job every day. It's not just a matter of just moving around some taxes. There are big real tax cuts. It gives a big increase in private welfare. It gives growth and employment. And that makes Denmark more reasonable."

TAGS: tax | Denmark | employees | retirement

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