Broad political agreement paves the way for lower VAT on food

The government and a broad group of parties in the Danish Parliament have agreed to allocate DKK 6 billion annually from 2028 to reduce VAT on food. The agreement is intended to help lower the cost of living for Danes, who in recent years have experienced significant price increases on groceries.

The parties to the agreement – the Denmark Democrats, the Socialist People’s Party, the Conservative People’s Party, the Red-Green Alliance, the Social Liberal Party and the Alternative – agree to launch a thorough process to identify models for either reducing VAT on all food or abolishing VAT entirely on fruit and vegetables. The aim is to create noticeable relief for consumers without imposing unnecessary burdens on businesses.

Minister for Economic Affairs Stephanie Lose states:
-“I am pleased that we have now entered into an agreement where we are setting aside DKK 6 billion to lower VAT on food. There are many Danes who feel the impact of high food prices. […] From 2028, we will be able to return another large multibillion-krone amount to the Danish people. This will help create greater security around household finances.”

Minister for Taxation Ane Halsboe-Jørgensen adds:
-“It should be cheaper to shop for dinner and packed lunches. […] The most important thing is that it can be felt and makes a difference.”

The work on designing the models for the VAT reduction will be anchored in a number of ministries – including the Ministry of Finance, the Ministry of Taxation, the Ministry of Economic Affairs, the Ministry of Industry, Business and Financial Affairs, and the Ministry of Culture – and will involve relevant stakeholders and experts. The parties to the agreement expect to receive the final report in the second half of 2026.

The purpose of the forthcoming VAT change is to create tangible improvements for consumers while also taking into account implementation in the grocery sector and the administrative workload for businesses. The final model for reduced VAT is expected to enter into force in 2028.