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Denmark no longer has OECD’s highest tax revenues

Denmark has been overtaken by France in a calculation of comparative tax revenues in the 36 countries in the OECD (Organisation for Economic Co-operation and Development).

Denmark no longer has OECD’s highest tax revenues
Photo: Kristian Djurhuus/Ritzau Scanpix

Since 2002, Denmark has topped the list of countries of OECD countries with the highest overall tax revenues.

But in the latest calculations by the intergovernmental economic organisation, which are based on figures from 2017 and published on Wednesday, Denmark has been overtaken – by France.

With an overall tax revenue of 46.2 percent of GDP, France moves above Denmark, which has a corresponding figure of 46.0 percent of GDP – down from 46.2 percent the previous year.

That places Denmark at number two on the overall list, with Mexico at the opposite end of the scale with taxes at 16.2 percent of GDP.

France is currently in the midst of weeks of social unrest over high living costs.

Meanwhile, comparison with neighbouring Sweden provides a better basis for comparison of Denmark’s taxes, Mads Lundby Hansen, lead economist with thinktank Cepos, said to Ritzau.

“Sweden is at 44 percent, two percent lower than Denmark,” Hansen said.

“That is the equivalent of around 40 billion kroner and is partly due to the fact that they have no vehicle registration tax [Danish: registreringsafgift, ed.],” he added.

Denmark’s tax revenue has remained close to 46 percent since 2000.

READ ALSO: Denmark still has world's highest taxes: report (from 2017)

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Danish customers face VAT charges on all non-EU purchases

All goods bought outside the EU will be subject to Value Added Tax in Denmark from July 1st.

Danish customers face VAT charges on all non-EU purchases
Packages in process at a Danish depot. Photo:Mads Claus Rasmussen/Ritzau Scanpix

A decision by the EU to scrap an exemption for low-value items mean that all purchases outside the bloc will now have VAT (moms in Danish) applied.

Under current rules, purchases of under 80 kroner (10 euros) do not qualify for VAT on import to Denmark, but that will no longer apply from July.

This means that anything purchased from, for example, China, the United States or United Kingdom on websites like Amazon and EBay will have VAT added to the price, no matter how small.

The Danish Customs Agency (Toldstyrelsen) said it was working to increase awareness of the incoming change amongst Danish consumers.

A recent YouGov survey, conducted on the agency’s behalf, found that 79 percent of 750 people were unaware of the impending extra VAT charges.

That proportion would correspond to over three million consumers across the entire population.

“It’s a real shame to be left with an extra bill if you think you’ve got a bargain. We want to help consumers avoid this,” said Annette Hove Nielsen, a section leader with the Danish Customs Agency responsible for customs checks on incoming packages at Copenhagen Airport.

Nielsen also directed consumers to the agency’s information page undgåprischok.dk.

Foreign residents in Denmark, particularly those from non-EU countries (including the UK since the beginning of 2021) may be more likely to have experienced VAT charges on parcels sent from abroad.

But those charges have previously only been applied in items worth over 80 kroner.

Goods purchased outside of the EU are subject to VAT at 25 percent of the purchase price. Postage and shipping charges are also generally applicable.

READ ALSO: How does income tax in Denmark compare to the rest of the Nordics?

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