COPENHAGEN, Aug 30 (Reuters) - The Danish government on Wednesday proposed cuts in capital gains tax to encourage people to invest in stocks some of the 850 billion Danish crowns ($137 billion) currently sitting idle on bank accounts.
Under the proposal, investors will be able to earn up to 100,000 Danish crowns per year on stock investments and be taxed at 27 percent. Currently, the maximum tax rate of 42 percent sets in at 51,900 crowns.
The move is part of the right-leaning minority government’s overall aim to remedy labour shortages by cutting taxes. Year-on-year growth in Denmark’s economy rose to 2.6 percent in the first quarter, and many firms complain about a shortage of qualified workers.
On Tuesday, it announced plans to cut income tax and levies on cars and household services by 23 billion Danish crowns per year up to 2025, but faces tense budget negotiations with opposition parties including pro-welfare and anti-immigrant Danish People’s Party (DF) it relies on to stay in power.
The proposed cut in capital gains tax comes in addition to an idea floated last week when the government said it wants to copy a Swedish and Norwegian model by allowing each individual to deposit up to 500,000 crowns that can be used for investing in stocks and pay 1.25 percent annually in tax on the deposit.
$1 = 6.2229 Danish crowns Reporting by Julie Astrid Thomsen; Editing by Jacob Gronholt-Pedersen and Richard Balmforth