In October 2025, with rare support from the Conservative Party (Danske Folkepartie), the Ministry of Finance announced the final national budget for 2026. We’re taking a closer look at how internationals are likely to be affected by Budget 2026 (Finanslovforslaget 2026) and what the changes could mean for your bottom line.
Daily savings and spending
Denmark’s electricity tax rates have long been among the highest in Europe. The government is temporarily eliminating the electricity tax for 2026 and 2027, lowering the tax to the EU minimum rate of 0.8 øre per kWh (for private households). This translates to approximately 3,600 DKK savings annually for an average household consuming 4,000 kWh per year.
A century-old excise tax on coffee, chocolate, and sweets has also made Denmark stand out from EU member states. As of July 1, 2026, duties on coffee, chocolate, and confectionery will disappear. The government estimates this reform will save the average resident 375 DKK in 2026, with the real savings likely to come from a vastly reduced administrative burden for businesses and the tax authorities.
Image credit: Kelly from Pexels
The tax on books (both print and digital) is also disappearing on July 1, 2026. In addition to getting rid of the 25% VAT on books, Budget 2026 also invests about 60 million DKK in a four-year literature action plan to strengthen Danish book and reading culture.
As a concession to the Conservative Party in exchange for supporting the budget, the planned increase to EV registration tax is postponed a year. This means rules around electric cars that were intended to come into force in 2025 will apply in 2026.
Meals for the elderly and people who are disabled will cost less, with 200 million DKK allocated to reducing personal contributions for municipal meal services.
Tied to EU court rulings regarding Denmark aligning VAT exemptions to EU standards, January 1, 2026 saw tax applied to many activities. Group instruction for dance, yoga, fitness, and similar activities (including so-called ‘mental sports’ like clubs offering instruction and tournaments for bridge, chess, backgammon, etc.), along with singing and music lessons in commercial settings are now subject to the standard 25% VAT. There is, however, a tax deduction in Budget 2026 that intends to mitigate the consequences of any price increases. It means more admin work for instructors, providers, and participants, but also more uniform application of EU tax provisions.
The bottom line: You’ll pay more for yoga and fitness classes, as well as for ‘mental sports’ and music lessons (although you might get some back through tax deductions). But less for electricity and books — and potentially see savings on your grocery bill. Rising food prices will impact people with disabilities and the elderly less. EV owners won’t pay more for registration just yet.
Shifting tax arrangements
Budget 2026 increases the standard employment deduction to 63,300 DKK. The personal deduction also increases (to 54,100 DKK in 2026), with double that for married couples, making 108,200 DKK before tax.
As part of the phased 2023 tax reform, a new structure creates a middle bracket, reducing national tax paid on earnings between 641,200 DKK to 777,900 DKK from 15% to 7.5%. Some estimates predict the new middle tax bracket will save around 300,000 workers up to 14,700 DKK in 2026. The extra top level (earnings over 2.59 million DKK) will now be taxed at 20%. Of course, other taxes (like municipal tax and labor market contributions) remain.
Additionally, Budget 2026 expands the employment tax credit for seniors from two to five years before retirement age and increases the senior bonus. Eligible earners will see higher net pay, potentially up to 7,950 DKK in 2026. Along with the postponement of tax increases on electric vehicles, this was one of the key demands from the Conservative Party in exchange for their support.
People under 18 are no longer levied labor market contributions (am-bidrag), the 8% tax paid on all salary income.
The bottom line: Many people won’t see a change, but mid- to high-income earners may have a lower marginal tax rate. And the government is asking very high earners to contribute a little more. Younger and older workers stand to pay a bit less in tax.
For parents
Over 1 billion DKK per year will go to improving childcare institutions. The government aims to reduce the maximum parental contribution to 21.3% (down from 25%) over the coming years and ensure daycares (vuggestue and børnehave) are adequately staffed. Around 1,400 additional full-time equivalent (FTE) pedagogical roles are included in Budget 2026. Furthermore, managerial personnel will be excluded from minimum staffing level calculations to provide a more realistic view of staff to child ratios.
Image credit: Erich Westendarp from Pixabay
Private childcare institutions will also receive approximately 100 million DKK and the standard deduction for childminders and childminder-like private childcare arrangements will increase from 60% to 65%. The well-being package of this year’s budget also earmarks funds to perform daycare facility quality surveys every four years.
There’s also a one-liner in the Budget’s well-being package introducing requirements for local institutions to adopt policies to remove smartphones and similar devices from primary schools and leisure activities. Approximately 40 million DKK a year for 2026-2029 will go to protecting children on the internet and strengthening democratic control of tech giants and social media.
A relatively small sum (20 million DKK in 2026 and 10 million DKK per year from 2027-2029) is allocated to supporting students in higher education acquiring and strengthening German and French language skills.
Budget 2026 sets aside 35 million DKK to equalize fertility treatments at six rounds for both first and second children. (Since October 2024, up to six attempts have been covered for a first child and, since December 2024, up to three for a second child.)
There’s also 35.9 million DKK in 2026 and 40.2 million DKK in 2027 for a new program to vaccinate pregnant people against RSV (respiratory syncytial virus), aiming to prevent serious illness and hospitalization, and specifically protect infants.
The bottom line: The government estimates an average decrease of about 3,200 DKK per year to send a child to daycare. Budget 2026 could compel primary schools and leisure activity providers to prohibit smartphones for students/participants. Improved access to fertility treatments means fewer out of pocket costs for parents looking to have a second child and there’s also better protection against RSV.
For employers (particularly of international workers)
Proposed in June 2025, Budget 2026 brings into force the Collective Agreement-based Employment Scheme (read our explainer on the program). This intends to provide businesses easier access to international labour from 16 countries, under regulated pay and working conditions. The provisions against social dumping also requires workers for major construction and civil engineering projects to carry ID cards.
Following last year’s funding for developing partnerships with India and the Philippines to recruit and train healthcare personnel (particularly in eldercare), Budget 2026 includes allocations to strengthen these relationships. (Since the budget was approved, the Ministry for the Elderly has entered agreements with the Philippines and India allowing Danish municipalities to hire up to 100 professionals each year starting in 2027.)
The bottom line: Workers from selected countries may have an easier time finding employment in Denmark — with healthcare workers from the Philippines and India particularly sought after. And hopefully gaps in eldercare are shored up.
Dealing with climate change
Noting that climate change brings more extreme weather, including more frequent and violent storms and more flooding, Budget 2026 allocates 1 billion DKK over 2026-2029 for climate protection. This includes environmental impact assessments for Copenhagen-region storm surge protection, carrying out nationwide dike inspections, and extending the coastal protection fund for properties threatened by flooding and high groundwater levels.
As part of the government’s goal to phase out gas boilers in Danish homes by 2035, 185 million DKK per year from 2027-2029 is designated to reducing the cost of heat pumps for private residences.
Budget 2026 also expands on the government’s 2024 green investment scheme to support environmentally sustainable industries (like wind power).
The bottom line: Future storms may bring less flood-related property damage. If you live or are building a residence near the coast, consider upping your due diligence — and if you own a home anywhere in Denmark with a gas boiler, think about transitioning to a heat pump.
Health and emergency preparedness
Regional programs for seasonal COVID-19 and influenza vaccinations have been allotted funds through 2028 (almost 645 million DKK in 2026, nearly 743 million DKK in 2027, and close to 748 million in 2028) to ensure a predictable roll-out and delivery stability.
Budget 2026 includes 500 million DKK annually in 2026-2029 to strengthen public safety and emergency preparedness. There’s also an additional 10 billion DKK allocated to defence and security. These funds will help the relatively new Ministry of Public Security and Emergency Management (created in August 2024, partially in response to increasing cybercrime, the security situation following Russia’s invasion of Ukraine, and increased concern about climate emergencies) rebuild the Danish defence forces through the Acceleration Fund and provide military support for Ukraine.
The bottom line: Seasonal vaccines continue to be prioritized, perhaps in recognition of their potential public health and economic benefits. And, more than ever, defence and security is at the forefront. Don’t forget your responsibilities to be prepared for a crisis.
Support beyond borders
The aforementioned 10 billion DKK allocated for defence and security means more military support for Ukraine. Additionally, Budget 2026 expands the government program to provide long-term loans and guarantees on exports and investments in Ukraine. There’s a 1.5 billion DKK reserve for 2026 (plus 400 million DKK in 2027) for expenses related to receiving displaced Ukrainians.
Within the Kingdom of Denmark itself, 400 million DKK is set aside for initiatives in Greenland every year through 2029.
The bottom line: Europe (even outside of the EU) continues to stand together.
