The Danish government wants to exempt purely domestic flights from VAT in the future under certain circumstances. This is a significant departure from the European trend, as Austria and Germany, for example, are trying to make short-haul flights unnecessarily more expensive through additional taxes.

While international flight connections are generally exempt from VAT, this is charged on domestic flights in most countries - including Denmark. Transport Minister Thomas Danielsen explains that carriers that only operate on the route within Denmark will in future receive an exemption from VAT. The government member said that the practice of domestic carriers being defacto penalized for only flying domestically will be ended.

Currently, Danish airlines can only be exempt from VAT on domestic flights if at least 55 percent of their scheduled flights consist of international routes. In contrast, “foreign” companies can also apply for tax exemption for domestic flights based on international agreements. This is currently not possible for Danish providers who are only active within Denmark.

In general, the government hopes that the change in taxation will lead to more domestic flights. It is hoped that this will lead to more competition and thus lower prices for passengers. The approach is completely different from that in Germany and Austria, because they want to promote aviation through lower taxation. In the Alpine republic and in Germany, attempts are being made to artificially make short-haul flights more expensive with the help of additional taxes.