The Danish government has received an additional DKK 4.5bn in taxation from Danish pension returns this year, which Insurance and Pension Denmark (I&P Denmark) has said is a “massive” contribution to society.

This comes as the Danish Minister of Economy, Stephanie Lose, launched the Economic Report, which forecasted that growth for the Danish economy was set to continue.

In addition to this, the report also predicted that employment was expected to continue to increase. 

I&P Denmark deputy director, Tom Vile Jensen, said: “The taxation of the return from our pension savings has a very significant impact on government finances.

“The economy looks good, and there is a large financial injection from pension taxation, which few Danes even know they pay.

“Therefore, there should be more visibility of Danes' contributions to the Treasury via their pension savings.”

He explained that last year alone, the pension yield (PAL) tax contributed DKK 10.1bn and the government has now adjusted this upwards by approximately DKK 4.5bn.

The additional revenue from the PAL tax is 1.5 times higher than the Treasury received from the abolition of the Great Prayer Day - a religious festival that was abolished as a Danish public holiday in February 2023.

Over the past 10 years, the PAL tax has provided the state with a total of DKK 359bn.

“The taxation of the return from our pension savings has a very large impact on state finances. It is a huge contribution to the economy that the industry and pension savers deliver year after year,” Jensen added.

---