Although the level of taxation in Denmark is among the highest in the world, the labor market participation rate is still high compared with other Western countries. Municipal income tax makes up the largest part of taxation in Denmark, with central government income tax topping it up. These income taxes are higher than in other OECD countries. These direct taxes make up two thirds of the taxation on private households with indirect taxes of the central government, and municipalities (property tax), making up one third, i.e. with motor vehicles (passenger cars, motorcycles, commercial vehicles) sold from VAT registered dealerships – because of the registration fee – being among the most expensive in the world, with prices in Norway at the same level, and the most expensive in Singapore. Also VAT in Denmark is not reduced from the current 25%. The 25% are paid on all goods and services where VAT is applied. Indirect taxes are about average compared with other European OECD countries. Payroll taxes (Danish sociale afgifter) are much lower than in other OECD countries. The tax structure ensures a broad tax base across the whole population. However, revenue from corporate taxes is lower compared with other European countries. Municipalities and the central government (regions are not allowed to levy any taxes, as they are financed by central government, and municipal block grants) redistribute a large amount of their tax income in transfer payments to municipalities with a low tax base and/or few tax payers. It is normal for children to be in nurseries, which requires a partial payment of the costs or is free of charge for low income households, and in kindergartens owned and operated, or financed, by the public sector. Child benefit is paid to parents for each child. The service to old age pensioners, and handicapped is extensive.
Although the level of taxation in Denmark is among the highest in the world, the labor market participation rate is still high compared with other Western countries Municipal income tax makes up the largest part of taxation in Denmark, with central government income tax topping it up These income taxes are higher than in other OECD countries. These direct taxes make up two thirds of the taxation on private households with indirect taxes. of the central government, and municipalities (property tax), making up one third, i.e. with motor vehicles (passenger cars, motorcycles, commercial vehicles) sold from VAT registered dealerships – because of the registration fee – being among the most expensive in the world, with prices in Norway at the same level, and the most expensive in Singapore. Also VAT in Denmark is not reduced from the current 25%. The 25% are paid on all goods and services where VAT is applied. Indirect taxes are about average compared with other European OECD countries. Payroll taxes (Danish sociale afgifter) are much lower than in other OECD countries. The tax structure ensures a broad tax base across the whole population. However, revenue from corporate taxes is lower compared with other European countries. Municipalities and the central government (regions are not allowed to levy any taxes, as they are financed by central government, and municipal block grants) redistribute a large amount of their tax income in transfer payments to municipalities with a low tax base and/or few tax payers. It is normal for children to be in nurseries, which requires a partial payment of the costs or is free of charg.e for low income households, and in kindergartens owned and operated, or financed, by the public sector. Child benefit is paid to parents for each child. The service to old age pensioners, and handicapped is extensive.