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Denmark: Proposal for Cut in Corporate Tax Rate

(Feb. 28, 2013) It was reported on February 26, 2013, that the Danish government published a Plan for Growth DK – Strong Companies, More Jobs (Vækstplan DK – stærke virksomheder, flere job) in which it proposes to reduce the current 25% corporate income tax rate to 22%. The change would be implemented gradually over the course of the years 2014-2016, by reducing the rate 1% a year. (Laura Pakarinen, <?Denmark: Government Plans to Reduce Corporate Income Tax Rate, IBFD TAX NEWS SERVICE (Feb. 26, 2013).)

The aim of the cut is to improve competitiveness and pull Denmark out of a recession, which set in after a property bubble that burst in 2008. That market change triggered a banking crisis and elimination more than a dozen lenders; the loss of 170,000 jobs in the last few years; and a diminished trade surplus in December 2012, the lowest in four years, because of the Danish krone being pegged to the strong euro. According to Sofie Carsten Nielsen, a spokeswoman for financial affairs for the Social Liberals, government coalition party “[w]e’re launching this to create jobs and growth. For years we’ve only discussed how to fund welfare spending, while now we’ve set out to create prosperity.” (Denmark to Cut Corporate Tax Rate, THE DAILY BUSINESS POST (Feb. 26, 2013).)