Revenue effects of introducing a one-off windfall tax in Denmark

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To prevent energy companies to benefit extraordinarily from the increasing energy prices, a windfall tax can be implemented to tax extraordinary profits arising from external factors such as an energy shortage in Europe.

In this report, HBS Economics examine the revenue effects from imposing a windfall tax on the Danish energy sector. Moreover, the report estimates the potential effects from expanding the windfall tax scheme to include all companies in Denmark.

The main results of the report are:

  • The Danish energy sector expects earnings before tax equivalent to approximately 30 billion DKK in 2022. This corresponds to a 42 per cent increase from the average between 2019-2020, which was 21 billion DKK.
  • With a windfall tax on 30 per cent on extraordinary profits in the Danish energy sector, we estimate a revenue of 1,1 billion DKK in 2022.
  • There is a considerable potential in expanding the tax scheme to include all sectors in Denmark. We estimate the potential tax revenue from such a tax scheme to be 10,5 billion DKK in 2022.

The report is based on quantitative data from the Danish CVR register, statistics on firm’s taxable income from the Danish tax authorities as well as publicly available financial statements from Danish companies.

This report is commissioned by the Danish Trade Union Confederation (in Danish, Fagbevægelsens Hovedorganisation).

Learn more about the evaluation

HBS Economics (2022): "Provenuvurdering ved at indføre en engangsskat på ekstraordinær profit i Danmark"