Denmark is preparing a major shift from its single-rate VAT system by considering a reduced VAT rate on essential foods from 2028, with the scope and technical details still under discussion.
Denmark Plans VAT Cut on Essential Food, but Scope Remains Unclear
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Denmark
Author: Ivana Picajkić
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Content accuracy validation date:
08.06.2026
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08:20h
Denmark is preparing to introduce a VAT cut on essential food products, marking a major shift from its long-standing single-rate VAT system.
On June 2, 2026, the government of Prime Minister confirmed that VAT on essential foods will be reduced. Earlier, on January 28, 2026, the Danish Ministry of Finance announced that a VAT cut on basic foodstuffs is planned for 2028. However, the government is still considering whether the reduced rate should apply to all food products or only to selected categories, such as fruit and vegetables.
The measure comes as food and non-alcoholic beverage prices in Denmark increased by around 3.2% to 3.5% annually as of January 2026. Similar measures are also appearing elsewhere in Europe, including Sweden’s temporary food VAT cut from April 2026 and Austria’s planned food VAT cut from July 2026.
Two models are currently being discussed. The first option is a general VAT rate reduction for food, for example, lowering the current 25% VAT rate to 20%. This would require amendments to Denmark’s VAT Act and would bring Denmark closer to other EU Member States that apply reduced VAT rates to food.
The second option is a more targeted zero rate or exemption for specific food categories, especially fruit and vegetables. This approach would be more complex from a compliance perspective, as businesses would need clear product classification rules to determine which goods qualify. It could also create practical challenges for mixed, processed, or packaged food products.
Both options are allowed under EU VAT rules, which permit Member States to apply reduced or even very low rates to foodstuffs, provided that the rules respect EU principles such as neutrality and proportionality. However, introducing reduced or zero rates would increase compliance complexity for retailers, food producers, and businesses operating across several jurisdictions.
The Danish Ministry of Finance has indicated that the reform would be technically complex and is unlikely to be implemented immediately. A longer legislative and system transition period is therefore expected. Until then, Denmark may consider non-VAT measures to address food price inflation.
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