Government wants to make differentiated VAT possible, interest rate unchanged, citizenship case at Supreme Court and more news from Denmark this Friday.
Government to look into differentiated VAT
The government says it has begun work on creating a system that can handle multiple VAT (moms) rates, paving the way for differentiated VAT on items such as food if politicians decide to implement it.
“We are now starting work so that, at some point, a political decision can be made on whether we want differentiated VAT in Denmark,” Prime Minister Mette Frederiksen told broadcaster DR.
The coalition government is yet to promise lower VAT on food although the Moderates support the idea.
Denmark currently applies a flat VAT of 25 percent, the highest rate on food in Europe.
Tax Minister Rasmus Stoklund said last month that technical obstacles currently prevent reform because outdated IT systems make implementation difficult.
A 2024 Finance Ministry analysis estimated that cutting VAT on fruit and vegetables to 15 percent would cost the state 2 billion kroner annually, but could encourage healthier diets and yield modest health savings.
The debate comes amid rising food prices, with the government already proposing to temporarily cut electricity taxes and to scrap levies on coffee and chocolate as part of the 2026 budget.
Advertisement
Central bank holds interest rate steady
Denmark’s central bank, Nationalbanken, yesterday kept its key interest rate unchanged, in line with the European Central Bank (ECB).
Nationalbanken generally mirrors ECB adjustments to the interest rate because of Denmark’s fixed exchange rate policy, which ties the krone to the euro.
Denmark’s deposit rate therefore remains at 1.6 percent.
The ECB kept rates unchanged at a deposit rate of 2 percent yesterday, the second consecutive meeting, at which no change has been made.
The ECB’s decision follows eurozone inflation figures showing consumer prices at 2.1 percent in August, with core inflation at 2.3 percent – close to the ECB’s 2 percent target.
“With inflation now close to the target and an economy that is weak but expected to improve, it doesn’t seem entirely unreasonable” to hold rates, Frederik Engholm, chief strategist at Nykredit, said in a comment to Ritzau.
Advertisement
Ministry decides to pause cases where citizenships awarded ‘by mistake’ are withdrawn
Cases where an individual is deemed to have been granted Danish citizenship by mistake are being put on hold, according to a briefing to parliament by Immigration Minister Kaare Dybvad Bek, reported by the Ritzau news wire.
The move follows a Supreme Court ruling last week in which the court upheld the authorities’ decision from 2017 that a man and his son were never Danish citizens, even though the father had been issued a citizenship certificate as far back as 1980.
The reversal, made 37 years later, was found to be lawful by the Supreme Court.
However, the court also stressed that a person who has been granted Danish citizenship in good faith, held it for a long period and organised their life around it, can keep that citizenship even if authorities later discover it was awarded by mistake.
We’ll have further detail of this story in a separate article on our website today.
Tourists missing near waterfall on Faroe Islands
Two tourists from South Korea and one from Mexico went missing a day apart last week in the Faroe Islands in the North Atlantic, all last seen near a waterfall, police said.
“In-depth searches have been conducted on land and at sea. The police have no other leads to follow,” local police told news agency AFP.
The two South Korean women, Soo Jung Park and Soo Yeon Park, were last seen on September 2nd around 5:30 pm, on the main island in the Danish autonomous territory.
Mobile phone data put their last location in the vicinity of Bosdalafossur, a waterfall that falls directly into the Atlantic Ocean, police wrote in a post on Facebook.
Mexican tourist Pedro Enrique Moreno Hentz, 68, was last seen the following morning, on September 3rd. His phone was last registered near the waterfall around midday the same day.
His backpack was found the day after on another island in the archipelago. Police provided no details or explanation of how it may have ended up there.
“Searches on land were suspended late Friday evening,” police chief Michael Boolsen told AFP.
“We will continue to search if we get any new leads,” he added.
“Bosdalafossur is not particularly dangerous in and of itself. But it is important to know that the terrain in the Faroe Islands is difficult, with high cliffs and sharp drops directly into the Atlantic,” he said.
The weather in the region on September 2nd and 3rd was fairly calm and clear, Boolsen said.
Four tourists have disappeared in the Faroe Islands in recent years.