Denmark to boost domestic flight by zero VAT

The Danish government proposes zero VAT for domestic airlines to bolster local aviation and align regulations, as international carriers currently enjoy VAT exemption. Transport Minister Thomas Danielsen asserts this move will facilitate more internal flights without penalties for domestic-only operations. The focus is on Midtjylland Airport, which received a 4.2 million kroner injection in 2023 and will obtain an annual 10 million kroner from next year. The Tax Ministry plans to enact the law by January 1, 2025. Tax Minister Jeppe Bruus emphasizes the importance of Midtjylland Airport for business and employment, expecting the VAT changes to ensure fair competition on domestic routes and enhance national connectivity. The support for regional airports originates from an aviation agreement made last year that included a flight tax to fund aircraft modernization and other initiatives.