ENVIRONMENTAL TAX IN DENMARK: EXCISE DUTIES ON PACKAGING WHEN SELLING ALCOHOL IN DENMARK

Foreign companies selling alcoholic beverages to Danish customers may not be aware of the national packaging duty that must be declared and paid alongside the excise duties for spirits, wines, and beers. The packaging legislation covers excise duties and the Danish bottle deposit scheme.

When selling certain goods in Denmark, companies will face different environmental taxes. The Danish environmental tax is intended as a “green tax” to discourage waste and pollution.

Overall, the taxation can be divided into:

• Taxes on environmentally harmful products that are included in consumption or production

• Taxes on emissions of pollutants

• Taxes on scarce resources

The environmental taxes to the Danish State are usually covered by the producers or importers, but the payment is charged to the end consumer. The aim is behavioral regulation through higher prices.

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The packaging tax is an example of taxation on products that create large amounts of waste. Packaging and disposable tableware are not in themselves particularly harmful, but the taxation is put in place to help to decrease the amount of waste.

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The packaging tax consist of both a unit tax on certain beverage packaging and a weight-based tax on carrier bags and disposable tableware.

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Containers with a volume less than 20 liters are liable for packaging excise duties no matter the shape and type. This could be for example balloons, cans, bottles, cartons and cups.

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Distributers or importers of alcoholic beverages (beer, wine, and spirits) in Denmark should expect to be liable to report and pay either packaging excise duties, or to be part of the Danish deposit and return of reusable containers system, called Dansk Retursystem.

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Packaging covered by the mandatory deposit and return system is exempt from excise duties (following changes of July 1st, 2019).

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The division of the containers in terms of taxation is dependent on the content.

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Containers of the following beverages are to be distributed within the return system and be marketed with the PANT label:

• Beer

• Carbonated beverages (such as soft drinks with an alcohol content of 0–0.5%)

• Other fermented drink products (such as cider with an alcohol content of less than 10%)

• Mixer products in which spirits, wine or other fermented products are mixed with other beverages such as soft drinks, cider, or juice (such as alcoholic soft drinks with alcohol content exceeding 0,5% but not exceeding 10%)

• Mineral water, water, lemonade, iced tea, and similar products that are non-carbonated and ready to drink

• Concentrated juice intended to be diluted before it is consumed

• Pure juice of fruits and vegetables

• Smoothies (without milk)

Beverages not covered by the return system may be liable to excise duties:

• Milk products and milk-based products

• Products not intended as beverages. (Can depend on individual assessment of the beverage).

• Wine, spirits, and other fermented beverages with an alcohol content above 10 percent  

Alcoholic beverages liable to the packaging excise duty are covered by the volume-based packaging tax. This means that the amount to be declared and paid is based on the material of the packaging and the number of packages sold in each volume category.

The categories for materials are:

• Glass, plastics, or metal

• Carton or laminate

After registering for the packaging tax, the warehouse keeper/consignee must, after the end of each tax period (month) with a deadline of 15 working days, declare on the Danish tax portal the quantity of the goods from which the company must pay tax.

For companies to be compliant with regards to excise duties in Denmark, they can rely on the services of an agent in the EEA network. We will make sure the correct registrations are in place, advise on data collection for declaring the excise duties and declare the numbers to the Danish tax portal.