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Electric cars overtake hybrids on Danish roads

There are now more fully electric cars than plug-in hybrid models on Danish roads.

Electric cars overtake hybrids on Danish roads
Interest organisations have called for more charging stations as the number of electric cars in Denmark continues to grow. Photo: Emil Helms/Ritzau Scanpix

The number of electric cars registered in Denmark now totals 97,121, eclipsing the 97,071 hybrid cars registered in the country, according to car maker interest organisation De Danske Bilimportører.

Electric cars are classed as using solely electric power, while plug-in hybrids can be powered by both electricity and petrol or diesel.

Car importers consider the trend to be a natural development resulting from the Danish Road tax system, which generally favours purely electric models. The registration tax (registreringsafgift) will increase more for hybrids than for electric cars in the coming years.

“There is a large increase in the number of rechargeable cars in Denmark’s car fleet, which is due to a more advantageous tax as well as a wider range of rechargeable car models,” CEO of De Danske Bilimportører, Mads Rørvig, told news wire Ritzau.

“We expect the number of electric cars in particular to increase in the lead up to 2035, when all new cars in the EU must be zero-emissions,” he said.

Just over 2.8 million cars are registered in Denmark. Of these, over 1.8 million were petrol-driven in August, while 780,000 have diesel engines, according to Statistics Denmark.

As such, the number of both electric and hybrid cars remains in the minority for now.

The Confederation of Danish Industry’s (DI) motor sector division Bilbranchen said it was impressed by the growing number of low emissions vehicles amid supply chain challenges.

“The motor industry is still affected by a shortage of components, especially microchips. And a lot of microchips must be used to make an electric car. It is remarkable, not least for this reason,” Bilbranchen director Thomas Møller told Ritzau in a written comment.

Taxes and EU criteria are also boosting electric cars, he noted.

Rørvig said the figures were evidence that Denmark needs more charging stations for electric vehicles.

The number of public charging points increased from 3,700 to 6,000 nationally over the last year, but that must be increased of the trend of electric car ownership is to continue, he said.

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TAXES

How does income tax work in Denmark?

Denmark is an expensive place to live, which makes understanding taxes even more important.

How does income tax work in Denmark?

All wage earners in Denmark pay an income tax (indkomstskat), which consists of various components. The largest part of most people’s income tax is municipality tax (kommuneskat), which I about 25 percent of your gross income (the actual percentage varies by 1-2 percent depending on the municipality in which you live).

A salary in Denmark also include deductions for labour market tax (AM-bidrag 8%), state tax (bundskat 12%) and state pension contribution (ATP-bidrag 94.65 kroner).

If you have an income of 45,500 kroner per month (which is the average salary in Denmark, according to Statistics Denmark), that means around 45 percent will be taxed, and 94.65 will go towards the state pension.

Various tax deductions can result in this amount being reduced, the most common one being for commuting to work.

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Depending on your earning levels, you may also be taxed at higher rate for the highest bracket of your salary. This high-wage tax bracket is called topskat (literally “top tax”).

The amount you need to earn to pay topskat changes each year but in 2024, the threshold is 640,108 kroner. After labour market contributions (AM-bidrag), this is 588,900 kroner. 

If you earn less than this, you don’t pay topskat. If you earn more than this, you pay a tax rate of 15 percent on all earnings from this threshold and up.

To give an example, if you earn 690,108 kroner before labour market contributions, you will pay 15 percent topskat on 50,000 kroner of your earnings – the amount by which the threshold is exceeded.

A major tax reform to be phased in from next year will see several changes to the income tax system, particularly in relation to top tax and other tax brackets.

Topskat will be halved for persons whose annual income is under 750,000 kroner, meaning they will pay a rate of 7.5 percent on income that falls into the topskat bracket, instead of the regular 15 percent. This “lower” rate of topskat has been termed mellemskat (“medium-tax”).

A new rate will meanwhile be introduced for the very highest earners, often referred to in Danish as toptopskat, literally “top-top-tax”. The new bracket will apply to people with annual incomes over 2.5 million kroner.

As well as income from employment, other types of personal income are included in the tax calculation. These can include pension distributions, social security benefits, property earnings, remuneration for advisory assistance and dividends from Danish companies.

complex list and system of deductions (fradrag) is used by the Danish tax model, such as the commuter deduction mentioned above as well as pension contributions, trade union and unemployment insurance memberships, home services and work costs. Deductions can be applicable to the various types of income or tax base.

Do you have any specific questions about the Danish tax system you’d like us to write about? Let us know.

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