Denmark Plans Food Tax Cuts But Businesses Face High Costs

Denmark wants to lower value-added tax on food to reduce grocery costs. However, new rules could cost businesses about 725 million Danish kroner every year.

Tax Minister Jakob Engel-Schmidt announced the plan on Monday. The government wants to cut general food tax. It also wants to remove tax on fruit and vegetables soon. However, changes will not happen this year.

Businesses must pay these extra administrative costs. The Confederation of Danish Industry expects even higher expenses. Tax chief Jacob Bræstrup warned that new rules will affect supermarkets and restaurants.

The overall proposal could cost the state 17.4 billion Danish kroner annually. Economists warn that shops might not lower consumer prices fully. Instead, stores may use tax savings to cover higher running costs. The government will present model options in late 2026. According to CPH Post, discussions are ongoing.