The Government and the Conservative People’s Party Reach Agreement on the 2026 Finance Act

he Danish Government and the Conservative People’s Party (Det Konservative Folkeparti) have reached an agreement on the 2026 Finance Act, which, according to the parties, aims to strengthen welfare, improve Danes’ personal finances, and ensure security, safety, and the green transition.

The agreement includes a range of economic relief measures. The electricity tax will be reduced to the EU minimum rate in 2026 and 2027, and taxes on coffee, chocolate, and sugary goods will be abolished. These changes are expected to provide a typical working-class family with approximately DKK 8,500 more per year.

Additionally, it will become more attractive for seniors to remain in the labour market. The period during which seniors receive an increased employment tax deduction will be extended from two to five years prior to the state pension age.

The Finance Act also allocates more than DKK 1.6 billion annually to better and more affordable childcare. Parental payments will be reduced by an average of approximately DKK 3,200 per child per year. Moreover, DKK 30 million per year has been earmarked for efforts to address involuntary school absenteeism from 2026 to 2029.

In the area of security, an additional DKK 10 billion will be allocated in 2026 for defence and military support to Ukraine, and DKK 0.5 billion annually for civil preparedness and emergency services. Approximately DKK 4.7 billion will go toward a sentencing reform and a future agreement concerning the police and the prosecution service.

To address climate protection, DKK 1 billion will be allocated from 2026 to 2029 for measures such as protecting properties from flooding and high groundwater levels.

At the same time, planned tax changes for electric vehicles will be postponed by one year, so that the 2025 rules will also apply in 2026. An expert group will be appointed to analyse future models for vehicle taxation.

Minister for Finance Nicolai Wammen (Social Democrats) states:
“I am very pleased with the Finance Act agreement the government has reached with the Conservative People’s Party. The agreement prioritises both close-to-home welfare and strengthens Danes’ personal finances. With the Finance Act, we are, for example, putting more adults into our day care institutions, and we are making historic investments in local welfare services such as schools, kindergartens, nursing homes, and hospitals. At the same time, we are drastically cutting the electricity tax. Danes will have more room in their household budgets. This is a very good Finance Act for Denmark.”

Minister for Economic Affairs Stephanie Lose (Liberal Party) agrees:
“The government is making it cheaper to be Danish. We have delivered the largest personal income tax cuts in over ten years – and now also the largest excise duty cuts on everyday goods in more than a decade. In short, we are ensuring that Danes have more money in their hands. We are doing this to ease the pressure on households and because we believe that people should be allowed to keep more of what they earn. At the same time, we are making it more attractive for seniors to remain in the workforce, and we are allocating more than one and a half billion kroner to a comprehensive childcare package. This means lower parental fees and better quality in institutions. I would like to thank the Conservative People’s Party for being part of a responsible agreement that makes everyday life easier for many Danes.”

Chair of the Conservative People’s Party, Mona Juul, also welcomes the agreement:
“This is a Finance Act for working Danes and families. We are pleased that we are providing tax relief to working seniors, freezing the registration tax on electric cars, and allocating more funds to help homeowners protect their homes against climate change. At the same time, we have secured the right for families to take bereavement leave if a mother or father passes away, and we are extending a helping hand to the school’s lost children – those with involuntary school absenteeism. These are all results that will be felt in Danish homes, and we are proud of that.”