Denmark: New tax on multimedia

A new multimedia tax will be introduced as from January 1st, 2010 amounting to a taxable sum of DKK 3,000 (this amount will change every year).

The amount is income and is taxed at source.

This new law has the following consequences:

• Employees who are provided with a computer, a telephone, or/and Internet for private use will be taxed.
• Internet will no longer be tax exempt even though the employees have access to the employer's network.
• The taxable sum is DKK 3,000, whether or not the employer's related expenses are more or less than DKK 3,000.
• The individual’s own private multimedia expenses will no longer reduce the taxable value.
• If both spouses in a household are provided with one or more multimedia, each of them will be taxed on DKK 3,000.

A cash contribution to cover telephone costs will still be taxable income with the actual amount. The current practice where the employer pays for documented work-related telephone calls will not be changed and the refund will still be tax exempt.

The employee will be taxed at 1/12 of DKK 3,000 for each month (DKK 250) in which the benefit is provided.

Who Is Liable to Multimedia Tax?

In general terms, an employee, who uses the benefit for private purposes (outside the workplace), will be liable to multimedia tax.
Multimedia provided at home (Internet and fixed-line phone) will always result in multimedia taxation. Multimedia provided at work, only used at the workplace, and never removed from the workplace, will not be taxed. Multimedia that can be removed (e.g., computer, mobile phone) may be subject to taxation, under certain conditions, if the employee removes the item from the work place.