Denmark’s four-party government coalition has proposed a wide-ranging tax reform package that includes cuts to Corporate Tax and Individual Income Tax, changes to VAT and Estate/Inheritance Tax, and the introduction of new sector-specific and environmental taxes.

RF Report

Denmark has published the four-party government coalition policy agreement on 2 June 2026, setting out a broad package of proposed tax reforms aimed at increasing national wealth, strengthening competitiveness, and encouraging work and investment.

The measures cover Corporate Tax, Individual Income Tax, VAT, Estate/Inheritance Tax, and a range of environmental and sector-specific taxes.

Corporate and business tax changes

The government aims to strengthen the competitiveness of Danish businesses through rate reductions and improved investment conditions.

  • Corporate tax reduction: The general corporate tax rate (selskabsskat) will be lowered by 3% over a three-year period.
  • Major shareholder model: To help finance the abolition of the “top-top” tax, a new model for major shareholders will be introduced. This ensures that their combined marginal tax rate is closer to that of top-bracket taxpayers.
  • Share income tax: The progression limit for share income will be raised by approximately DKK 20,000, meaning the lower 27% tax rate will apply to the first DKK 110,000 of gains.
  • Share savings account (aktiesparekonto): The deposit limit will be significantly increased to DKK 500,000, and the government will explore simpler taxation methods for these accounts.
  • Business support reform: The government intends to “sanitise” broad business support schemes to find DKK 1.5 billion in savings.

Individual income tax changes

The government intends to simplify the income tax system and reduce the burden on higher earners to encourage labor supply.

  • Abolition of the middle tax (mellemskat): This tax tier will be eliminated entirely.
  • Abolition of the “Top-Top” tax (toptopskat): The highest tax bracket, recently introduced, will be removed.
  • New tax bracket structure: Following these reforms, the system will consist of a bottom tax (bundskat) for incomes up to DKK 777,900 and a top tax (topskat) of 15% for income exceeding that threshold.

Deduction adjustments:

  • Interest deduction: A new cap on interest deductions will be introduced at DKK 150,000 for singles and DKK 300,000 for married couples.
  • Commuter deduction: A temporary increase in the transport deduction is planned to aid citizens affected by rising fuel prices.
  • Union fees: The deduction for professional union fees will be adjusted to specifically target members of unions with collective bargaining rights.
  • Education and research: The deduction for education and research will be targeted and adjusted, providing approximately DKK 1 billion in revenue.

VAT, estate, and environment

  • VAT (moms) reductions:
    • Food: VAT on all food items will be halved.
    • Fruit and Vegetables: VAT will be completely removed for these items.
    • Books: The government will finalise the planned abolition of VAT on books.
  • Estate/Inheritance tax (boafgift):
    • The base threshold will be raised to DKK 550,000.
    • A new progression tier of an additional 15% will be introduced for estates valued at over DKK 10 million.
    • Real estate tax: An expert commission will be tasked with investigating a model for taxing realised capital gains on home sales as a trade-off for lower ongoing property taxes. This will include a “home equity guarantee” to ensure homeowners do not pay tax on gains accumulated before the new system’s implementation.

New specific taxes:

  • Tech tax: A new tax targeting tech giants is proposed, with a revenue goal of DKK 1 billion annually.
  • Aviation and maritime: New passenger fees will be introduced for cruise ships and private flights.
  • CO2 tax on livestock: As part of a broader green agreement, a CO2 tax will be applied to livestock production.

Environmental adjustments: The tax on depositing asbestos for private individuals will be removed to encourage safe roof renovations. Conversely, the existing chocolate and sugar tax will be maintained to help fund the broader tax reform.

The proposed measures form part of a wider government strategy to simplify the tax system, encourage economic activity, support investment, and secure funding for public priorities. The reforms remain proposals and will be subject to further legislative development and implementation processes.