New Danish government wishes to create better conditions and more growth for the business community

Anders HedetoftPartner, Attorney-at-law, Holst, Advokater

In June 2015, the Danes elected a new government and, according to the new coalition agreement, the new liberal government focuses on improving conditions for family-owned and management-owned businesses as well as on creating growth in the business community.

The Danish government works to implement a simpler system of business taxation and an improved regulatory framework for succession in order to promote growth and job creation. The plan is to earmark DKK 570 million for support of these initiatives from 2016 onwards. Of this sum, DKK 510 million has been set aside in connection with the most recent years’ agreements on growth.

“Family-owned businesses form the basis of the Danish business community. They are vital in ensuring growth and the creation of new jobs. For this reason, we will set aside a total of DKK 2.1 billion in the period 2018 to 2020, so that family-owned businesses may be provided an improved framework for retaining Danish jobs and development opportunities, also in the course of the succession process. Moreover, we will reinstate the capital taxation price for unlisted shares and in that way abandon the former government’s narrow provisions for the transfer of unlisted shares.”

At the same time, the government wishes to abolish a number of taxes and duties that are weighing down Danish businesses. These are taxes and duties such as the NOx-duty (a duty on nitrogen oxides), which is of great importance to eg production companies, which consume substantial amounts of energy. Furthermore, the government wishes to abandon the former government’s advertising duty before it becomes effective in 2016.

In addition, the new government’s proposals include these items on Danish taxes and duties:

  • DKK 150 million will be earmarked each year in the period 2016 to 2019 for a growth programme, which will support efforts to create growth throughout Denmark. Amongst others, the initiatives are to create more jobs outside the primary urban areas of Denmark.
  • DKK 75 million will be earmarked each year in the period 2016 to 2019 for support of initiatives in the foodstuffs- and agricultural sectors, which will make it easier to be a Danish farmer.
  • The capital taxation price for unlisted shares will be reinstated to allow family-owned businesses a better regulatory framework. It is estimated that the immediate consequence will be a lesser revenue of DKK 600 million after return and conduct in 2016.
  • Export and investment efforts will be supported by DKK 40 million in 2016.

Contact our specialists if you have questions on direct and indirect taxation in Denmark.