Global Daily Tax News, Denmark Enacts Laws For Environmental Tax Reforms, (Jun 21, 2024)

Denmark has enacted two environmental tax reform bills, including provisions to ensure the country reaches its environmental goals by 2030.

The first bill – Act no. 683 of June 11, 2024 – includes various carbon tax regime changes that will become effective from January 1, 2025. These changes will, among other things, align the scope of Denmark's regime more closely with that of the EU's Emission Trading Scheme. In addition, the tax burden will be lowered for mineral and metallurgical processing firms.

From January 1, 2025, the following carbon tax rates will apply:

• DKK750 per tonne of CO2 for companies outside the EU's cap and trade system;

• DKK375 per tonne of CO2 for companies within the EU's cap and trade system; and

• DKK125 per tonne of CO2 for emissions from mineralogical and metallurgical processes.

In addition, a separate bill – Act no. 620 of June 11, 2024 – has been enacted to establish a tax on air travel tickets for domestic and international flights departing from Denmark, starting with tickets sold from January 1, 2025.

The air tax rate would vary depending on the length of the flight, with an average charge of DKK70 per ticket in 2025. This will rise to DKK100 per ticket by 2030, with rates indexed in line with inflation from 2031 onwards. Transfer passengers, crew, and passengers under two are exempt.