Global Daily Tax News, Denmark To Amend Rules For Investments In Renewable Energy, (Mar 9, 2026)

The Danish Government has announced a proposal to amend the rules for long-term price hedging contracts to support companies engaged in the production of renewable energy.

The Danish Government noted, "Long-term price hedging contracts are used, among other things, to create security for investments in large green construction projects such as solar parks and wind farms. [...] The contracts reduce the risk of fluctuating electricity prices for companies and investors and thus provide greater security."

"Under current tax rules, certain long-term hedging contracts are taxed according to the so-called inventory principle. This means that companies may find themselves in a situation where they have to pay tax on increases in the value of the contract, even if the company has not yet received the income on which they are taxed. This can cause liquidity problems for companies."

The Government is proposing instead that the rules be changed so that only actual payments under such contracts will be taxed.

"The green transition is crucial, and it requires that we design the rules in a way that is consistent with the reality for companies. With the agreement, we ensure that taxes are paid only when there is actual income. This provides a proper and predictable framework for the investments that are necessary for us to move forward with the green transition," said Ane Halsboe-Jorgensen, Denmark's Minister of Taxation.

Draft legislation to implement the changes is to be released for consultation.