Reminder: Denmark Plans Reduced VAT on Food and Zero VAT on Books

Denmark plans to halve VAT on food and apply zero VAT to fruit and vegetables from 2028, while zero VAT on printed books, e-books and audiobooks is expected from 2027. Retailers may need new product-level VAT mappings in POS and ERP systems.

Denmark is preparing two VAT changes that could directly affect retail pricing and Point-of-Sale System configuration. The government plans to halve VAT on food and remove VAT entirely from fruit and vegetables, while a separate proposal would introduce zero VAT on printed books, e-books and audiobooks. Neither measure should yet be treated as enacted law.

Denmark currently applies a general VAT rate of 25% to taxable goods and services. The Danish Tax Authority confirms that the standard rate under Section 33 of the VAT Act is 25%, and European Commission material lists both foodstuffs and books in Denmark at that rate. The planned reforms would therefore introduce different VAT treatments for product categories that retailers currently generally process at 25%.

The government’s policy is to halve VAT on food products and introduce zero VAT for fruit and vegetables. If implemented as announced, halving the existing 25% rate would result in a 12.5% VAT rate for food within the reduced-rate category, while qualifying fruit and vegetables would be taxed at 0%.

Detailed legislation establishing the final product scope and implementation rules has not yet been adopted. Parliamentary work in 2026 shows that technical questions remain, including how fruit and vegetables should be defined. The reform is expected from 2028, subject to legislation and the necessary technical preparations.

For retailers, product classification will be central. A supermarket may eventually need to distinguish between fruit and vegetables taxed at 0%, other qualifying food taxed at 12.5%, and non-food products remaining at 25%. Until the legislation defines these categories, businesses should not assume how particular products will be classified.

Bill L 125, introduced in February 2026, proposed zero VAT on books. The measure covered printed books as well as e-books and audiobooks. However, Bill L 125 lapsed following the election and therefore did not create an operative VAT change.

The measure is more accurately described as zero VAT or zero-rating than an ordinary VAT exemption. Under the earlier proposal, qualifying book sales would no longer carry 25% output VAT, while businesses would retain their right to deduct input VAT. Official parliamentary material also indicated that publishers and importers could instead become subject to payroll tax for the relevant activity.

For book retailers, the practical effect is clear. Businesses selling books together with stationery, games or other merchandise would have to distinguish zero-rated books from products that remain subject to the standard VAT rate.

Impact on retailers and POS systems

If the reforms are adopted as planned, Denmark’s retail VAT environment will become more differentiated. Retailers that currently use the standard rate across most taxable merchandise may need several tax treatments at product level.

For grocery retailers, POS and ERP systems may require new tax codes and product mappings for zero-rated fruit and vegetables, reduced-rate food and standard-rated non-food products. Pricing, accounting exports, VAT reporting and product master data would also need to remain aligned with those classifications. Mixed baskets would make correct Stock Keeping Unit-level VAT assignment particularly important.

Book retailers would face a similar, although narrower, change from 2027 if the book proposal is enacted. Printed books, e-books and audiobooks falling within the final legal definition would need to be distinguished from other merchandise taxed at 25%.

At this stage, the available material does not indicate new fiscal receipt or digital sales-registration requirements. The main retail-system consequence is the potential need to calculate, record and report several VAT treatments correctly within the same sales environment.

What should impacted businesses do?

Retailers should continue applying the existing VAT rules until the relevant legislation takes effect. Food retailers should monitor the final definitions of food, fruit and vegetables and avoid changing POS tax mappings before the scope and implementation date are legally confirmed.

Book retailers should follow the new legislative proposal expected for the January 1, 2027 zero rate and identify systems in which books currently share the same VAT code as other merchandise. POS, ERP, accounting and product-master-data teams should also check whether their systems can support product-specific VAT rates without disrupting pricing or reporting.

From a retail compliance perspective, the challenge is not simply changing a percentage. The more important task will be maintaining accurate product classification from the product database and checkout through accounting and VAT reporting. Final legislation and technical guidance should therefore be reviewed before system changes are implemented.

The main sources for these changes are the Danish Ministry of Finance official announcements from 2026, regarding reducing VAT on fruit and vegetables and VAT on books. Source Source

Ivana Picajkić, Medior Legal Consultant at Fiscal Solutions

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