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Denmark Pledges To Lower Tax Burden More

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2018


The Danish tax burden will continue its downtrend trend in the coming years, Danish Tax Minister Karsten Lauritzen has said.

His comments came ahead of the release of the Government's Tax Economics Report 2018, due to be published in mid-June. He pointed out that Denmark's overall tax burden fell from 47 percent of GDP in 2013 to 45 percent last year.

Key changes to reduce the tax burden have included a reduction in the corporate tax rate from 25 percent to 22 percent.

Continuing to ease taxation remains a "cornerstone" of the Government's tax policy, said Lauritzen, noting that February's coalition agreement included plans to reduce taxes on labor and increase deductions for pension contributions.

The OECD's most recent Taxing Wages report revealed that Denmark has one of the highest personal income tax burdens in the OECD, at over 35 percent. Taxing Wages 2018 shows that the "net personal average tax rate" – income tax and social security contributions paid by employees, minus any family benefits received, as a share of gross wages – averaged in at 25.5 percent across the OECD.

By comparison, average net personal average tax rates for single workers with no children earning the average wage was 35.8 percent in Denmark in 2017, with only Belgium (40.5 percent) and Germany (39.9 percent) having a higher tax burden on these taxpayers in the same year.

Denmark was also found to have the heaviest burden of taxation as a percentage of the economy in a study of 34 countries' tax burdens by accountancy firm UHY, published earlier this year, which put the country's tax take at 53.5 percent of GDP in 2017.

TAGS: tax | value added tax (VAT) | Belgium | Denmark | employees | tax rates | social security | Germany | Tax

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