Tax regulation mechanism
Updated: 04.01.2019
Author: Karl Wikberg
The Act on the Carbon Dioxide Tax on Certain Energy Products and the Act on the Energy Tax on Mineral Oil Products oblige companies producing, processing, possessing, receiving or dispatching energy products to pay a defined amount of tax (§ 1 Act 1118/2014 and § 2 Act 321/2011). This amount is lower if the fuel is blended with biofuels (Annex 2 Act 1118/2014).
Eligible technologies
Only biofuels are subject to the reduced tax rate.
Amount
The amount of tax due is lower if the taxed energy product (gas, diesel or petrol) is blended with biofuels. From 2016, the regulation of tax rates is based on the net price index’s annual average in the year two years preceding the calendar year in which the rate applies. Hence, the rates increase or reduce by the same percentage as by which the net price index has changed from the level in 2014 (§ 32a Act 1118/2014).
Tax bands for the year 2019:
- Sulfur-free diesel oil:
- pure: 275.7 øre/liter
- blended with 6.8% biofuels: 274.2 øre/litre
- Petrol:
- pure: 433.9 øre/litre
- blended with 4.8% biofuels: 426.5 øre/litre (https://www.skm.dk/skattetal/satser/satser-og-beloebsgraenser/mineralolieafgiftsloven)
Addressees
Companies producing, processing, possessing, receiving or dispatching energy products are obliged to pay the tax (§ 3 Act 313/2012).
Procedure
Process flow | The obliged companies must inform the authorities on the amount of taxable energy products on a monthly basis (§§ 6 and 7 Act 1118/2014). |
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Competent authority | Ministry of Taxation |
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Distribution of costs
| State | The costs of the tax relief are borne by the state. |
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Denmark
