Denmark will allocate DKK 6 billion annually from 2028 to cut VAT on food or exempt fruit and vegetables, aiming to ease rising living costs and lower supermarket prices for households.
The Danish government has agreed on a framework to reduce living costs, including food prices, by allocating DKK 6 billion annually from 2028. The funds will be used either to lower VAT on all food products or to provide a VAT exemption for fruit and vegetables.
This announcement was made on 28 January 2026.
The agreement, reached with the Denmark Democrats, Socialist People’s Party, Conservative People’s Party, Red–Green Alliance, Social Liberal Party, and The Alternative, responds to rising food costs, which have outpaced general consumer prices in recent years.
Alongside the VAT initiative, the government has introduced other measures to strengthen purchasing power, including tax reforms, wage increases for welfare workers, higher elderly allowances, lower electricity duties, and VAT removal on coffee, chocolate, and books. Employment deductions for seniors and reduced parental fees in day-care institutions are also included.
Final proposals on the VAT reduction or exemption are expected in the second half of 2026, ahead of implementation in 2028.
