Effective 1 January 2026, the Danish government introduced a temporary reduction of the electricity tax to the EU minimum level. The measure forms part of a broader national strategy to accelerate the green transition, strengthen household finances and promote widespread electrification. It is intended to support long‑term climate goals while easing financial pressure on both households and businesses.
From 2026 to 2027, the electricity tax will fall from 72 øre/kWh (approximately 0.1 EUR/kWh) in 2025 to just 0.8 øre/kWh (approximately 0.001 EUR/kWh), the lowest level permitted under EU law. By lowering the tax to this minimum threshold, Denmark aims to encourage the use of clean electricity over fossil‑based alternatives and promote behavioural changes linked to electrification.
For households and businesses with limited VAT deduction, the electricity tax will result in significant financial savings. Beneficiaries include:
For fully VAT‑deductible businesses, the impact will be minimal. Under existing rules, VAT‑registered businesses have long been able to reclaim electricity tax—except for 0.4 øre/kWh—provided they fulfil the legal conditions for reimbursement.
To support Denmark’s electrification goals, a temporary reimbursement scheme for electricity used to operate charging stations has been in place for several years and will continue until the end of 2030. The scheme promotes the expansion of charging infrastructure and strengthens the economic case for electric vehicles.
Under current legislation and case law, the end consumer of electricity at charging stations is the party that operates the charging stand, and bears the full economic cost and carries the operating and maintenance risk. As a result, charging operators, not the individuals or businesses charging their vehicles, are generally considered the end consumers for electricity tax purposes. As such, only charging operators are entitled to claim reimbursement of electricity tax on consumption at charging stations.
Despite these long‑standing rules, many businesses remain uncertain about whether they can claim reimbursement for electricity used at charging stations installed on their premises.
Many businesses are installing solar panels to reduce carbon emissions and energy costs. Electricity generated from such installations is generally exempt from electricity tax if specific legal requirements are met.
However, combining solar panels with charging stations can create unintended tax consequences:
Charlotte Sørensen
BDO in Denmark
From 2026 to 2027, the electricity tax will fall from 72 øre/kWh (approximately 0.1 EUR/kWh) in 2025 to just 0.8 øre/kWh (approximately 0.001 EUR/kWh), the lowest level permitted under EU law. By lowering the tax to this minimum threshold, Denmark aims to encourage the use of clean electricity over fossil‑based alternatives and promote behavioural changes linked to electrification.
Impact on Households and Businesses
For households and businesses with limited VAT deduction, the electricity tax will result in significant financial savings. Beneficiaries include:
- Private households
- Municipalities
- Non‑profit institutions
- Other VAT‑restricted entities.
For fully VAT‑deductible businesses, the impact will be minimal. Under existing rules, VAT‑registered businesses have long been able to reclaim electricity tax—except for 0.4 øre/kWh—provided they fulfil the legal conditions for reimbursement.
Charging Stations and Electricity Tax
To support Denmark’s electrification goals, a temporary reimbursement scheme for electricity used to operate charging stations has been in place for several years and will continue until the end of 2030. The scheme promotes the expansion of charging infrastructure and strengthens the economic case for electric vehicles.Under current legislation and case law, the end consumer of electricity at charging stations is the party that operates the charging stand, and bears the full economic cost and carries the operating and maintenance risk. As a result, charging operators, not the individuals or businesses charging their vehicles, are generally considered the end consumers for electricity tax purposes. As such, only charging operators are entitled to claim reimbursement of electricity tax on consumption at charging stations.
Despite these long‑standing rules, many businesses remain uncertain about whether they can claim reimbursement for electricity used at charging stations installed on their premises.
Charging Stands and Solar Panels
Many businesses are installing solar panels to reduce carbon emissions and energy costs. Electricity generated from such installations is generally exempt from electricity tax if specific legal requirements are met.However, combining solar panels with charging stations can create unintended tax consequences:
- In certain configurations, businesses may be required to register, report and pay electricity tax on electricity produced by their solar panels if it is used in connection with charging infrastructure.
- These obligations typically arise from technical interactions between renewable energy rules and regulations governing charging stations.
Charlotte Sørensen
BDO in Denmark