Danish Government to Abolish Tax Exemption on Electric Vehicles.

During the presentation of the Danish governments’ proposal for the 2016 budget negotiations, Minister of Finance Claus Hjort Frederiksen (the liberals) proposed an abolishment of tax exemptions on electric vehicles. Hereby, the new government suggested to abolish the 2016 prolongation of the tax exemption that had been instated by the previous government earlier this year.


The decision to retract the instated 2016 tax exemption, follows the publication of new calculations from the Ministry of Taxation estimating a 200 million DKK increase in the estimated costs of the tax exemptions. The new calculations estimate that the exemption will cost 650 million DKK in 2016, whereas it in previous calculations was estimated to cost 450 million DKK.


The reasoning behind this increased estimation is, according to the Ministry of Taxation, both increasing sales and increasing prices within the electric vehicle industry. This combination will, if the tax exemption is maintained, therefore cause increased registration fee losses.


According to the proposal, registration fees on electric vehicles will gradually be applied until 2020, where electric vehicles are to be subject of full registration fees.

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