Denmark's Forsikring & Pension (F&P) has warned that the new bill on social contributions is a “serious mistake” that will affect several Danish pension and insurance companies and their customers.

The Minister of Taxation recently presented a bill on plans for a social contribution to Folketing, the Danish parliament, although F&P warned that this is an "opaque tax" that could hit members "hard".

The group also argued that it is “completely wrong” to impose an extra tax on Danish insurance and pension companies, which already make a large contribution in the form of tax payments and contributions to the green transition.

Indeed, F&P pointed out that Danish pension and insurance companies contributed DKK 33bn via taxes and fees in revenues to the Treasury in 2020 alone, with F&P pension companies also on track to make a record contribution of DKK50bn in 2021.

F&P CEO, Kent Damsgaard, commented: “It is basically a mistake if a political majority imposes a special tax on insurance and pension companies, which already contribute massively to the Treasury and to society with welfare and security for the Danes - and the development of green solutions.

“The special tax on financial companies is called a 'social contribution' in the bill, but the fact is that it is an opaque tax, which will hit several Danish pension and insurance companies and their customers and members hard.

“We will definitely call on the government and the Folketing to reconsider the proposal before it becomes a reality.”

Despite these concerns, F&P welcomed the agreement that revenue from the introduction of digital cash registers - and the fight against tax and VAT fraud - will be used to limit the special tax.

Damsgaard added: “We are pleased that the politicians have clearly indicated that the proceeds from the fight against VAT fraud can be used to limit and hopefully completely eliminate the special tax.

“It is also a far more natural and obvious source of funding than a special tax on our companies, which to a very high degree already take responsibility for and contribute to our society.

"But it has long-term prospects, so we are calling on the government and the Folketing to now put on their work clothes and get that part of the agreement implemented.”

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