Good advice about duties encompasses legal and economic aspects as well as guidance in the practical application of the rules.

Denmark levies more excise duties than any other country in the world. These are taxes on specific products and certain activities/services.

When a company manufactures products or offers services that are subject to these duties, or when it imports them from abroad, the company must register and pay duties on these goods/activities to the Danish Tax Agency. There are various types of registration (e.g. warehouse operator, recipient of goods, temporary recipient of goods, shipper, distance seller). The type of registration depends on the specific legislation for that particular excise duty.

Companies registered for payment of VAT may, up to a certain limit, receive reimbursement of these duties via their energy consumption. Companies are also entitled to reimbursement of excise duties for goods destined for export on which excise duties have been paid. It is therefore important that exporting companies know their products and know whether excise duties have been paid at an earlier stage.

Several pieces of excise duty legislation include a provision for joint and several liability. This means that a company having purchased dutiable goods in good faith from a supplier not having paid the duties to the Danish Tax Agency may risk having to pay the supplier’s outstanding debt.

Danish excise duties are organized in four categories: Energy tax, consumption tax, environment tax, and traditional excise duties:

  • Ice cream, ice cream mixtures (air volume tax), chocolate and sugar confectionery, almonds, nuts, and seeds plus taxes on products containing chocolate and/or almonds, nuts, seeds, and the like.
  • Spirits, wine, fruit wine, wine-based alcopops, beer, and malt-based alcopops
  • Energy tax
    • Mineral oil products such as gas and diesel oil, fuel oil, heating fuel, petroleum, gasoline, gas, carburetor fluid, lubricant, bio-oils and methanol, coal products, heating from municipal incineration plants, electricity, natural gas, municipal gas, and carbon dioxide
  • Consumption tax
    • Cigarette paper, chewing tobacco and snuff, electric filament lamps and inert gas bulbs including fluorescent lamps, neon tubes, and similar strip lights, and fuses for power systems; coffee, coffee extracts and coffee substitutes.
  • Injury and damage insurance, pleasure craft insurance, civil liability insurance for motor vehicles, and workplace injury insurance
  • Environment tax
    • Packaging, bags, disposable cutlery, PVC foils, certain types of waste, raw materials such as granite, gravel, soil, lime, chalk, clay, sand, and slate, piped water, tyres, pesticides, batteries (nickel-cadmium accumulators), portable batteries and accumulators, sulphur, CFCs and certain industrial greenhouse gases, waste water, nitrogen, antibiotics and growth agents, drinking water protection (ground water tax), PVC and phthalates, car scrapping/stripping (environmental contribution), mineral phosphorus in animal feed phosphate, and nitrogen oxides
  • Motor vehicle registration fee, road tax, fuel tax (‘green tax’), weight tax and the like, plus registration of vehicles (licence plates)
  • Lotteries offered by Danske Spil and the state owned lottery, profit-generating gambling machines in game arcades and restaurants, land-based casinos, betting, online casinos, charitable lotteries, local pool betting on horse races, etc., gambling in connection with public amusements, gambling without bets, certain sweepstakes and competitions, etc., and bank account prize draws
  • Cigarettes, rolling tobacco, cigars, cheroots, and cigarillos.

Payroll tax

Companies whose activities are exempt from VAT are often required to pay a payroll tax. This could involve activities such as medical treatments, teaching, financial transactions, insurance transactions, gambling, the transportation of people, and the publication of newspapers.

 

There are four payroll tax calculation methods. The appropriate method will depend on the company’s activities and organisational structure:

  • Method 1: Pertains to organisations, funds, associations and guilds, companies offering gambling exempt from VAT, and public companies with no taxable profits. These are required to pay 6.37% of their payroll as a payroll tax.
  • Method 2: Pertains to companies whose main activities involve finance and insurance, regardless of their organisational structure. These are required to pay 14.5% of their payroll as a payroll tax.
  • Method 3: Pertains to companies that publish or import newspapers. These are required to pay 3.54% of their turnover.
  • Method 4: Pertains to companies not covered by the other methods. These are required to pay 4.12% of their payroll plus/minus taxable profits or deficits without financial items (with certain adjustments).

 

Do you require advice about duties or a binding response from the Danish Tax Agency to confirm how your company activities should be treated with regard to duties as per a Danish Tax Agency assessment?

Contact us for a no-strings-attached discussion. It is free of charge. All you need to do is give us a call or send us an email. Call us today on (+45) 7930 1710 or send us an email at info@hwlaw.dk, and we will get back to you quickly.

 

Duties related proceedings – proceedings against the Danish Tax Agency

If the Danish Tax Agency has contacted you with a view to initiating proceedings related to duties, it can be of huge significance to the outcome of the case if it is dealt with properly from the beginning. That’s why it’s a good idea to involve an advisor specialising in excise duties at the earliest possible stage, if only to clarify whether assistance is required.

 

Hejm Vilsgaard Advokater has a lot of experience with duties related litigation at every level of the court system. If the Danish Tax Agency has ruled in your duties case, we offer a free overview assessment of your case.

We will give you our honest assessment whether you have a strong case against the Danish Tax Agency. We also offer to discuss with you what we think would be the most appropriate way to proceed.

If you decide to lodge a complaint with respect to the ruling by the Danish Tax Agency at the National Tax Tribunal or to pursue the case through the courts, we will be pleased to provide an estimate of the fee for handling your case. Your expenses will usually be recoverable in accordance with the rules for cost reimbursement. This means that the Danish Tax Agency will cover 50% of costs if the case is lost or substantially lost. If the case is won or substantially won, the Danish Tax Agency covers 100% of costs.

 

Do you need to discuss a duty related matter?

Contact us for a free initial assessment of your case. We are ready to help you. All it takes is a phone call to (+45) 7930 1710, or send us an email at info@hvlaw.dk. We will get back to you quickly.