22 September 2014

Denmark to cut corporate tax rate

08:37, Bloomberg News

Denmark is to cut its corporate tax to 22 percent from 25 percent to improve competitiveness and pull the Nordic country out of a recession.

The tax cut and other measures to boost growth and employment will be presented today in Copenhagen by Prime Minister Helle Thorning-Schmidt, Sofie Carsten Nielsen, a spokeswoman for financial affairs at government coalition party the Social Liberals, told Bloomberg News.

The Danish economy is struggling to emerge from a burst property bubble in 2008 that triggered a local banking crisis and wiped out more than a dozen lenders. Gross domestic product probably contracted 0.4 percent last year, matching a decline in the 17-member euro area, the government has estimated.

“We’ve been challenged by losing 170,000 jobs in recent years,” Nielsen said in a phone interview yesterday. “We’re launching this to create jobs and growth. For years we’ve only discussed how to fund welfare spending, while now we’ve set out to create prosperity.”

Denmark, which ties its krone to the euro, had in December the lowest trade surplus in four years as exporters suffer from the sting of a strong euro via Denmark’s currency peg.