Tax News Update    Email this document    Print this document  

August 26, 2022
2022-1301

Denmark publishes draft bill introducing a cultural levy of 6% on turnover generated by Danish and EU-based digital streaming platforms and services in Denmark

  • The draft bill proposes to introduce the levy as a financial culture contribution, collected from digital streaming platforms and services that offer on-demand streaming services aimed at a Danish audience.
  • The draft bill will be subject to public comment until 12 September 2022, after which it will be presented in Parliament.
  • The Danish Government has assessed that the cultural levy should not conflict with the BEPS 2.0 Agreement and it is intended that the proposed cultural contribution levy should follow the BEPS 2.0 Agreement.

On 15 August 2022, the Danish Minister of Culture published a draft bill introducing a cultural levy of 6% on the turnover generated by Danish and European Union (EU)-based digital streaming platforms and services in Denmark. The draft bill will be subject to public comment until 12 September 2022, after which it will be presented in Parliament.

The draft bill proposes to introduce the levy as a financial culture contribution, collected from digital streaming platforms and services that offer on-demand streaming services aimed at a Danish audience. The levy is calculated as 6% of the provider's turnover in Denmark arising from the on-demand services. The draft bill only applies to digital streaming platforms and services established in Denmark or another EU Member State. It is assumed that the levy can be deducted for Danish tax purposes when calculating the taxable income for entities subject to tax in Denmark.

Denmark has not traditionally levied a digital services tax, and since an agreement was reached at the OECD1 level on 8 October 2021 to remove all unilateral digital services taxes and other relevant similar measures, the Danish Ministry of Culture has consulted the Danish Ministry of Taxation to assess whether the draft bill is an infringement of the BEPS2 2.0 Agreement. The Danish Government has assessed that the cultural levy should not conflict with the BEPS 2.0 Agreement. It is the intention that the proposed cultural contribution levy should follow the BEPS 2.0 Agreement. Consequently, the proposed cultural contribution levy should be adapted when the multilateral convention has been completed and the precise wording and scope of application have been finally determined.

The bill is proposed to be applicable as of 1 January 2023.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young P/S, Copenhagen

Ernst & Young P/S, Aarhus

_________________________________________

ENDNOTES

1 Organisation for Economic Co-operation and Development.

2 Base Erosion and Profit Shifting.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement