The Danish economy is losing out on billions of kroner as an increased number of the nation’s consumers continue to take their online shopping abroad.
Last year, Danes spent 17 billion kroner on buying goods and services via foreign online shops – almost double what was spent in 2012 and, for the first time, in excess of the amount spent at border shops, which last year was12 billion kroner.
“The number of Danish online consumers purchasing abroad is staggering,” Annette Falberg, the head of the organisation for Danish online shops (FDIH), told Jyllands-Posten newspaper. “It looks as if that trend will continue so that the balance will be even more askew and not in Denmark’s favour.”
In particular, the Danes are fond of purchasing films and TV series, music and clothes abroad, but also sporting goods and electronics. Lower prices and a greater selection are cited as the main reason for shopping abroad via the net.
SKAT smells profits
The increase has also been noticed by the tax authorities, SKAT, which registered tax returns almost twice what was paid by foreign online shops two years earlier: from 231 million kroner in 2011 to 435 million kroner in 2013.
But aside from all of the online companies abroad that need to pay VAT to Denmark when conducting business with Danish clients, SKAT is increasing its focus on the overall issue.
“It’s an area that we are increasingly looking into,” Erling Andersen, a spokesperson for SKAT, told Jyllands-Posten. “Looking ahead to 2015, we have appointed ten full-time employees to monitor the VAT payments of foreign online shops to Denmark. Until now we have had six people assigned to doing this.”
The Danish business organisation Dansk Erhverv has urged the politicians to reduce the costs associated with doing business in Denmark in an effort to become more competitive.