Denmark considers tourist tax to fund local tax cuts

Visiting Copenhagen or Aarhus could soon cost more for tourists. However, local residents in Denmark may see their income taxes drop. The Danish government considers a tourist tax of 20 Danish kroner per night. It also proposes a new fee on cruise ships. Danish media outlet Børsen first reported the government plans.

The new tourist charges aim to help fund tax cuts for residents. Under the proposal, the government wants to abolish the middle tax rate. This tax applies to people earning between 641,200 kroner and 777,900 kroner yearly. The government also plans to eliminate the top top tax rate. Corporate tax would fall from 22 percent to 19 percent over three years.

Investors and savers could benefit as well. The tax-free limit on share savings accounts would rise to 500,000 kroner. Meanwhile, inheritance tax on large estates would increase by 15 percentage points. Interest tax deductions would also face new caps for individuals and couples.

To cover the tax cuts, the government will use state surplus funds. This amounts to 1.5 billion kroner in 2027 and 2 billion in 2029. The minority government needs support from other parties to pass the proposal. The Liberal Party opposes taxing Danes who visit their own capital.