New VAT rules and tax deduction for exercise and education take effect

From 1 January 2026, Danes will be required to pay VAT on membership fees for exercise as well as singing and music tuition. At the same time, a new tax deduction will be introduced to compensate for the additional VAT payment. A tax expert from PwC outlines the new rules.

From 1 January 2026, Danes aged 30 and over will, for the first time, have to pay VAT on membership fees and similar payments for exercise as well as singing and music tuition. This change follows rulings from the EU Court of Justice. To offset the additional VAT burden, a new tax deduction will be introduced from the turn of the year.

-“The new VAT rules apply to commercial providers such as fitness centres, private yoga studios, pilates, aerobics, crossfit, spinning and dance schools. However, there may be situations where it is unclear whether an association is required to charge VAT,” says Søren Bech, and continues:

-“Expenses for golf and horse riding, which ‘involve a non-negligible physical element’, are also considered to be expenses for exercise.”

The new VAT rules apply to all Danes who have turned 30 by the end of the year. This means that if you turn 30 in 2026, the rules will apply throughout the entire year.

Who does not have to charge VAT?

Exercise offered by non-commercial providers such as amateur sports and athletics associations will not be covered by the new rules, as these services are not provided with a view to making a profit.

The same applies, for example, to services offered by adult education centres, folk high schools for day courses and folk universities that are eligible for subsidies under the Adult Education Act, as well as services offered by folk high schools that receive subsidies under the Act on Folk High Schools.

The list is not exhaustive.

The rules on the introduction of VAT are set out in a new bill that the government has sent out for consultation.

How the exercise deduction will work

The deduction for exercise-related services will be capped at DKK 1,750 in 2026, regardless of whether you have higher expenses for exercise and music tuition activities. The amount will be adjusted in line with inflation in subsequent years.

The deduction requires that the tuition or service is offered with a view to making a profit.

The deduction is a ligningsmæssigt (assessment-based) deduction, providing a tax saving of approximately 25–26 per cent. This means the maximum tax saving will be around DKK 440–450 in 2026.

-“If the membership fee is, for example, DKK 300 per month or DKK 3,600 annually, and VAT of 25 per cent is added in full from 1 January 2026, the additional cost will be DKK 900, bringing the total to DKK 4,500 in 2026. The tax saving from the deduction will be a maximum of around DKK 450, meaning there will still be an additional cost of DKK 450 in 2026,” says Søren Bech, and continues:

-“Only if the membership fee increases by around DKK 450 in 2026 alone will there be no additional expense. If you are a member of several associations that are required to charge VAT, it cannot be ruled out that your total membership payments in 2026 and beyond will increase, as the proposed deduction will have a maximum of DKK 1,750 (2026).”

How to claim the deduction

Initially, the proposal requires individuals to report the amount they are entitled to deduct themselves on their annual tax assessment to the Danish Tax Agency. You must provide a CVR number, SE number or CPR number, as is also required for, for example, the service deduction.

-“Be sure to keep documentation proving that you have paid membership fees from 1 January 2026, such as an invoice, as this is a requirement for being able to claim the deduction,” Søren Bech concludes.