Unpopular magazine tax postponed

Tax minister decides to delay implementation of new tax on magazines to determine how to impose it without significant price hikes or breaking international law

February 28th, 2012 2:33 pm| by admin

After mounting pressure, the tax minister, Thor Möger Pedersen, has decided to postpone the implementation of a new law which would add enormous levies to magazines imported from outside the EU.

The government wants to close a tax loophole that allows publishers to avoid paying VAT by printing their publications outside the EU. But for the government to collect the 25 percent VAT on non-EU magazines, the postal service, Post Danmark, has warned it would have to charge recipients a 160 kroner levy to help defray the cost of sorting through the nine million magazines arriving in Denmark annually.

It is expected that this levy would cull readerships of many specialised publications from outside the EU and has led many to speculate that Denmark would be breaking an international convention guaranteeing the free movement of educational, scientific and cultural material.

As a result, Pedersen has decided to postpone the law's April 1 implementation. “We need to investigate it, so the government has decided to postpone the proposed law,” he told Politiken newspaper.

Pedersen added that it was never the intention to make magazines prohibitively expensive and that all the government wanted was to ensure that Danish printers could compete on the same footing as foreign printers.

“That’s why we are looking at different methods of collecting the VAT when the magazines enter Denmark in order to see if it can be done in a cost effective way,” Pedersen said.

While the government has said it would raise 60 million kroner by closing the loophole, Post Danmark has said it would cost 237 million kroner to manually sort the magazines, a cost it would recoup by charging the levy.

Danish companies need to hire more refugees, but on lower wages
Danish Capital in 2015: High wages and education requirements a deterrant to employable refugees
With Europe facing an unprecedented refugee crisis, all associated matters ...
Livslinien annually receives 5,000 calls in the late hours (photo: iStock)
Danish government retracts grant for suicide helpline’s night opening
With its finance bill for 2016, the government aims to cancel four million ...
Nørgaard was inspired by Easter Island statues among other things (photo: Tivoli)
Danish artist unveils Hans Christian Andersen giant head at Tivoli Hotel
On Friday, the renowned Danish artist Bjørn Nørgaard unveiled a four-metr...
When the incentive to reach the top is not financial
Why Innovation?: Purpose is the profit
For centuries, success has been objectified as how much money we earn and t...
Out & About: CIS students dyeing their hair for peace
Photos: CIS The Copenhagen International School community once ag...
(Photo by iStock)
Today’s Date: Storm of Friedrichstadt
October 4 Storm of Friedrichstadt Today is an official military flag da...