Denmark: Reduces Corporate Tax as Part of Growth Plan
A new Danish Growth Plan announced earlier this year includes a lower corporate tax rate, reduced energy taxation and better access to financing. With the plan, the Danish government aims to improve conditions for doing business in Denmark by improving the framework conditions for operating a business.
Key elements of the Danish growth plan:
- Lowered corporate taxation. A gradual reduction of the corporate taxation from the current 25% to 22% by 2016. (Rates are proposed at 24.5% in 2014, 23.5% in 2015, and 22% in 2016.) The current EU average is 23%.
- Reduced energy taxation. Significant reduction of energy tax and levies.
- Improved access to financing. Better access to financing and liquidity for companies through an extension of VAT credit periods for companies, growth loans for entrepreneurs, small growth guarantees and new export guarantees.
- Increased tax credits for costs linked to R&D activities. As of income year 2012, companies with tax losses related to R&D can request of refund (tax credit) for the tax value of up to 5m DKK. The amount would be increased to DKK25m effective from 2015.
- More and improved continuing education in order to raise the overall competence level of the Danish workforce.
- More public investment projects. Increased level of public investments and a dedicated effort towards increasing investments in remodeling of private homes and energy remodeling of public buildings
- Strengthening international competiveness. Funding to address key challenges within Danish key sectors with growth potential to enhance international competitiveness.
In addition to the growth plan, the Danish Government has launched a number of initiatives in order to retain and improve Denmark’s position as one of the most advanced, competitive, and business friendly economies in the world. Invest in Denmark reports that those initiatives include the launch of an innovation strategy and growth teams within eight focus sectors.
Denmark already ranks at the top of surveys such as the World Bank’s Ease of Doing Business report, and this proposed Growth Plan aims to induce even more foreign companies to choose Denmark.