Danish airlines operating solely within Denmark will not be subject to value-added tax (VAT) rules in the future, Taxation Minister Jeppe Bruus said at a press conference at Karup Midtjyllands Airport on March 4.
He said he plans to bring a proposal forward on the matter in the autumn so that new regulations can enter into force on January 1, 2025. Transport Minister Thomas Danielsen elaborated in a statement: “It does not make sense that you are punished for only flying domestically. We are doing away with that now so that there will be room for more domestic flights.”
The government claims to be seeking fair competition practices, as Danish carriers operating only domestically must comply to local VAT rules while foreign companies operating routes within Denmark do not have to. According to legislation currently in place, zero VAT only applies to Danish airlines if foreign traffic constitutes more than 55% of their operations.
The announcements came after AIS Airlines (Netherlands) (PNX, Lelystad) became the sole operator of the route between Midtjyllands and Copenhagen Kastrup when DAT - Danish Air Transport (Kolding) decided to terminate its scheduled flights last September. AIS operates under Dutch tax rules and the new legislation in Denmark is not expected to impact the airline.
ch-aviation capacities data shows that in the week starting March 11, 2024, six airlines have domestic seat capacity in Denmark, including Danish scheduled carriers DAT and Sunclass Airlines (DK, Copenhagen Kastrup) as well as virtual carriers Alsie Express (Sønderborg) and WorldTicket (W1, Copenhagen Kastrup), while the operators with both the largest seat and frequency capacities are Norwegian Air Sweden AOC (D8, Stockholm Arlanda) and SAS Scandinavian Airlines (SK, Copenhagen Kastrup).
