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26 August 2022

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.

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

Ernst & Young P/S, Copenhagen

Jens Wittendorff | jens.wittendorff@dk.ey.com

Malte Søgaard | malte.soegaard@dk.ey.com

Ernst & Young P/S, Aarhus

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Endnotes

Organisation for Economic Co-operation and Development.

  • Base Erosion and Profit Shifting.

    Document ID: 2022-5811

     
     

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