Denmark plans to reduce VAT on basic foodstuffs from 2028 and is currently debating whether the cut should apply to all food or be limited to fruit and vegetables, marking a major departure from its long-standing single 25% VAT rate model.
While both options are permitted under EU VAT rules, each would increase compliance complexity, and the government has indicated that any change will require a lengthy legislative and system transition rather than a quick implementation.
Denmark Considers Cutting VAT on Food but Faces Structural Challenges
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Denmark
Author: Ivana Picajkić
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Fiscal subject related
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Content accuracy validation date:
06.02.2026
Content accuracy validation time:
09:55h
Denmark has confirmed that it plans to reduce VAT on basic foodstuffs from 2028, following rising food prices. However, the government has not yet decided how broad the cut should be.
On January 28, 2026, the Ministry of Finance confirmed that it is debating two options:
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applying a VAT reduction to all food, or
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limiting the cut to fruit and vegetables only.
Either option would mark a major shift away from Denmark’s long-standing approach of applying a single VAT rate (25%) to almost all goods and services.
Food and non-alcoholic beverage prices in Denmark increased by around 3–3.5% year-on-year by January 2026. Similar measures are already happening elsewhere:
- Sweden introduced a temporary food VAT cut from April 2026,
- Austria plans a food VAT cut from July 2026.
The government is reviewing two possible approaches:
- One option is a general reduction in food VAT, for example lowering the rate from 25% to 20%. This would require changing Denmark’s VAT law to introduce a reduced rate for food, bringing Denmark closer to how most EU countries apply VAT.
- The other option is a targeted zero or reduced rate for specific items, mainly fruit and vegetables. While more focused, this approach would be more complex to manage, as it requires clear product definitions and ongoing classification rules, especially for processed or mixed food products.
Both options are allowed under EU VAT rules, which permit reduced or even zero VAT rates on food. However, adding new rates would increase compliance complexity for businesses, especially retailers and food producers.
The Ministry of Finance has indicated that any VAT change will take time and is unlikely to be implemented quickly. A longer legislative and system transition period is expected, and in the meantime, Denmark is also considering non-VAT measures to help control food price inflation.
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