Denmark reaches 11-billion-kroner tax reform deal to cut income and corporate taxes

Denmark's government has agreed on an 11-billion-kroner annual tax reform deal. The political agreement will eliminate both the middle tax and highest top-top tax rates. Over 600,000 residents in Denmark will gain more disposable income from these cuts.

Denmark will switch to a simplified two-rate personal income tax system. The basic state tax will be set at 12 percent. Income over 800,500 kroner annually will face a 15 percent top tax. In addition, corporate tax rates will drop by three percentage points across Denmark.

The reform also triples the deposit limit for share savings accounts. Next year, petrol and diesel taxes fall by two kroner per litre. Tax rebates for electric cars over 366,000 kroner are extended for one year.

To secure opposition support, the government agreed to adjust student education grants. Students living at home with parents earning over 700,000 kroner lose state SU grants. Green Left leader Pia Olsen Dyhr noted that upcoming budget proposals will balance inequality. The budget will add new taxes on wealthy heirs and costly homes.