Much is said and reblogged/tweeted about the famous 180% on cars in Denmark. Back when rationality was fashionable, this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents.
For every kilometre driven by car, the Danish state pays out 16 cents.
Those numbers are from the “Socio-economic analyses of bicycle initiatives - methods and cases”, produced by COWI in 2009.
For a more local feel, if you ride in Copenhagen from Øster Allé to Nørreport during rush hour here’s the societal benefit and loss:
Bicycle: 63 cents net profit for society. (3.65 DKK)
Car: $1.15 net loss to society. (6.59 DKK) So you can see that it has previously been important to reclaim some of the money that we’ve been throwing into a big, bottomless hole by subsidising car culture. It’s basic economics. Worth noting that these numbers reflect the aforementioned taxes on cars in Denmark. I think I’d throw up a little bit in my mouth if someone could calculate the net loss in countries without such taxes. So. What ARE these taxes of which we speak? First let’s look at what cars cost, based on the Danish cost of living. In Denmark a basic compact car will cost you about 100,000 DKK. ($17,400). A new Honda, depending on model, will cost between 200,000 DKK ($34,700 USD) and 500,000 DKK ($86,900). A new BMW, again depending on model, will set you back between 400,000 DKK ($69,500 USD) and 2.5 million DKK ($434,360 USD). That probably looks nasty pricey to many out there, but the cost of living here in Denmark is high. Wages are high. Things are expensive to visitors. For example, minimum wage - if you work as a bartender at the age of 20 or something like that - is around $20.00 USD per hour. When I was working at Danish Broadcasting as a journalist at the age of 37, my annual wage was about $80,000 USD per year. Just to put it in perspective. On top of the list price of the car, here are the taxes that make up the 180%. But please consider the disclaimers that follow.
The 180% on top of a basic car price
Sales and registration: 106,960 DKK ($18,583 USD) Ownership tax: 44,562 DKK ($7742 USD) Insurance tax: 8412 DKK ($1461 USD) Fuel tax at 15,000 km/year of 15 km/liter: 50,989 DKK ($8,857 USD) Total taxes over 12 years: 210,922 DKK ($36,643 USD) So all that looks like a dreamy scenario for those who are working towards the Paradigm Shift of replacing the deadly cars in our cities with intelligent transport forms. Wonderful that Denmark taxes motorists for the destruction they cause in our cities and in the country in general We still hear misconceptions out there about these taxes. Things like , “they only ride bikes in Denmark because they can’t afford a car”. Nah. Nice try. In Copenhagen, car ownership is at 29.1%. It’s even lower in certain neighbourhoods; Nørrebro (14%) and Vesterbro (17%). But people don’t own cars because they don’t need to. There are a host of other transport options, including the bicycle. Out in the distant provinces, when a young person - usually a young man - turns 18 the first thing he does is pay the $2000 fee for a driving licence course and then, upon successful completion, buys a car. So cars are not inaccessbile to Danes when 18 year olds can afford them. And this brings us to the current reality. Since the 180% taxes came into effect, the Danish wages have increased dramatically. So they are no longer as prohibitive as originally planned. In other words, they are rather irrelevant. Car ownership has been rising consistently over the past 15 years at least. Even the gas prices here - currently at about $2.17 per liter (roughly $8.70 per gallon) are lower than they were in the 1970s, at the height of the two energy crises. What’s more, I heard today that the fuel tax, which as I understand it carries a certain environmental aspect, is also increasingly redundant. Simply because cars are more fuel efficient and “environmentally-friendly” than when the taxes were implemented. The money earned by the Danish state on these taxes has fallen from 24 billion DKK ($4.1 billion USD) to just 14 billion DKK ($2.4 billion USD). While these famous 180% taxes were meant well back in the day, they are rather comical now. The automobile burden on our society is greater than at any point in the last 40 years.
All the more reason to raise the taxes - through simple rationality and economics - and to invest in better public transport, car share programmes and bicycle infrastructure.
I love cycling around the city, so I really think the 180% tax on cars is a good thing - it encourages us to use our bikes more and be more environmentally conscious. It’s very cool to not be stuck in a traffic jam with hundreds of cars and enjoy the fresh air! In addition, cycling saves money, which gives me the opportunity to spend it on any other pleasure. Sometimes I even try my luck at an online casino after a trip. For bike lovers, I’ve found some really cool bike themed slot machines. They are fun and perfectly capture our passion for cycling. They most likely won’t make us rich, they will certainly make our everyday life more exciting!
FAQs
Back when rationality was fashionable, this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents.
How much is the tax on a car in Denmark? ›
Calculation of the vehicle registration tax is based on the rules for passenger cars: 25% of DKK 67,800 (2023), DKK 70,200 (2024) 85% of DKK 67,800-210,600 (2023), DKK 70,200-218,100 (2024) 150% of the rest.
Why is it so expensive to own a car in Denmark? ›
Cars are expensive in Denmark generally because of the high tax. New cars are very, very expensive, used cars are just expensive. If you buy a car in Germany and want to bring it to Denmark, you still have to add the tax after you buy the car. Here is a little about the taxes and why it was decided to add those taxes.
What is the car fee in Denmark? ›
The most common fee is the registration tax, based on the vehicle's value and age. This tax can range from 10-180% of the vehicle's value. Additionally, an annual road tax must be paid for all vehicles registered in Denmark. This tax is based on engine size and fuel type, ranging from DKK 1,000 to DKK 4,500 per year.
Is Denmark the highest taxed country in the world? ›
Politicians and parties making this assertion typically refer to the fact that the OECD (Organisation for Economic Co-operation and Development) has listed Denmark as the highest tax country for several years. The most recent OECD report listed Denmark as top, followed by France, Belgium, Italy and Sweden.
Which country has the highest tax on cars? ›
What Countries Have the Highest Tariffs Placed on Cars? There are several countries that have very high tariffs placed on cars. For example, the Maldives places a tariff on cars at approximately 111 percent. India also places a very high tariff on cars, coming in at around 106 percent.
How much are Denmark's taxes compared to the US? ›
In 2021, the tax wedge for a single worker with no children earning a nation's average wage was 35.4 percent in Denmark, 36.0 percent in Norway, and 42.6 percent in Sweden. The tax wedges of the Scandinavian countries are now higher than the U.S. tax wedge of 28.4 percent and the OECD average of 34.6 percent.
Why does Denmark pay so much tax? ›
Following World War II, as with many other countries, Denmark began to enact several social welfare programs, including aid for the sick and the unemployed. These, along with expansion of the public sector (schools, teachers, etc.) contributed to the income tax being a staple of Denmark's tax revenue.
Why is it so expensive in Denmark? ›
There are reasons for this, among other things, the high rate of VAT of 25 percent and the high average income in Denmark means the costs can be greater! Denmark is a leader in the food industry with numerous slaughterhouses, dairies and grain mills.
Can you live in Denmark without a car? ›
But even if you can't or don't want to cycle, you can still get by in most places without a car, thanks to Denmark's excellent public transport networks. Public transport in Denmark has significantly improved only over the last five years, with several new metro lines and light rail systems opening.
Looking at the Top 50 rankings up to July 2024, the best seller in Denmark was the Tesla Model Y with 5,478 sales (-40.7%), followed by the Tesla Model 3 -up 2 spots- with 3,717 new registrations (+93.6%) and the Volkswagen ID.
What is the most expensive country in Europe to own a car? ›
The average cost of car ownership in Europe was the highest in Switzerland, with 1,313 euros, and the lowest in Greece, with 905 euros, in 2022.
What is the new car tax in Denmark? ›
The registration tax applied to new cars in Denmark is value-based and amounts to 85% of the car's taxable value up to DKK 197,700 (€26,500), and 150% for the value above, according to the ACEA 2020 Tax Guide.
What percentage of people own a car in Denmark? ›
Advertisem*nt. The number of households who own one or more cars increased by 233,800 over the ten-year period, according to the agency. That equates to 62.3 percent of all households owning a car in 2021, compared to 59.6 percent a decade prior.
Is parking free in Denmark? ›
In Copenhagen city, and most of the districts, public parking spaces and car parks are not free but require payment by the hour. In Frederiksberg the first two hours are free, after this paying is required. The app Easypark features this in. In other municipalities such as Gentofte most public parking is free.
Why does Denmark have such a high tax rate? ›
Following World War II, as with many other countries, Denmark began to enact several social welfare programs, including aid for the sick and the unemployed. These, along with expansion of the public sector (schools, teachers, etc.) contributed to the income tax being a staple of Denmark's tax revenue.
Who has the highest car tax in Europe? ›
Looking at the average annual tax revenue per motor vehicle in major EU markets, it largely differed in 2022. Spain (€1,148) collected the least tax per vehicle whereas Belgium (€2,892) collected the most. This figure was €1,625 in France, €1,764 in Germany, and €2,723 in Finland.
What is the highly skilled tax in Denmark? ›
Researchers and highly paid employees recruited abroad have the opportunity, under certain conditions, to be covered by a special tax regime in Denmark. The tax system is particularly known as the researcher tax scheme. The scheme allows paying a gross tax of 27% + AM contributions, totaling 32.84%.
What is the supercar tax in Denmark? ›
Taxes/duties regarding cars
The rates in 2024 for passenger cars are 25% of the value up to DKK 70,200, 85% of the value from DKK 67,800 up to DKK 210,600, and 150% of the value in excess.
Much is said and reblogged/tweeted about the famous 180% on cars in Denmark. Back when rationality was fashionable, this series of taxes was put into place to try and discourage people from driving but also to try and win some money back for society for the destructive nature of automobiles. We know, for example, that for every kilometre ridden by bike, the Danish coffers recieve 23 cents.