Denmark Aviation Tax Guide

Air Passenger Duty (Flyafgift)

Denmark introduced an air passenger duty (flyafgift) effective January 1, 2025, with rates phasing up through 2030. The tax is payable by the airline per departing passenger from Danish airports and is collected by the airport operator and remitted to SKAT monthly.

• 2025 rates: Domestic flights 30 DKK, EU/EEA flights 50 DKK, non-EU flights 100 DKK per departing passenger. Children under 2 are exempt. Connecting passengers (connecting within 24 hours at the same Danish airport) are exempt on the connecting segment.
• Scheduled increases: Rates are set to rise to approximately 50/100/200 DKK by 2030 under the green tax reform trajectory. The increases are designed to fund green aviation initiatives including SAF subsidies.
• Exemptions: Cargo-only flights, ambulance and medical evacuation flights, military flights, government flights (Forsvaret), and flights operated by aircraft with maximum take-off mass below 2 tonnes are exempt. Passengers in direct transit (arriving and departing on the same aircraft within 24 hours) are also exempt.
• VAT treatment: Flyafgift is not subject to VAT — it is a separate excise duty. Airlines cannot deduct the flyafgift as input VAT. For corporate tax, flyafgift is a deductible operating expense for the airline.

Sustainable Aviation Fuel (SAF) Incentives

• SAF blending mandate: From 2025, fuel suppliers at Danish airports must blend a minimum percentage of SAF into jet fuel: 2% in 2025, increasing to 5% in 2030, and 70% by 2050 under the EU ReFuelEU Aviation regulation. The mandate applies to all fuel uplifted at Danish airports.
• SAF tax credit: Airlines purchasing SAF above conventional jet fuel costs may qualify for a SAF tax credit (bæredygtigt flybrændstof fradrag) of up to 0.50 DKK per litre of SAF uplifted (2025 rate). The credit is calculated as the difference between the SAF price and conventional jet fuel price, capped at a maximum credit per litre. The credit is deductible against the airline's corporate tax liability (non-refundable).
• Double counting for CORSIA: SAF used to meet the blending mandate counts double towards CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) reduction requirements, reducing the airline's offset purchase obligation.
• VAT on SAF: SAF supplied as fuel for commercial aviation is subject to the same VAT treatment as conventional jet fuel — generally 0% VAT when supplied as stores for commercial international aviation under ML §5, stk. 1, nr. 5.

Aircraft Acquisition and Leasing

• VAT on aircraft purchase: Acquisition of aircraft used for commercial international aviation is 0% VAT under ML §5, stk. 1, nr. 5 (supplies as stores for aircraft engaged in international transport). The zero-rating covers the aircraft itself and equipment installed for aviation purposes (engines, avionics, seats). Aircraft used exclusively for domestic flights do not qualify for zero-rating and are subject to standard 25% VAT.
• Aircraft leasing — VAT: Lease payments for aircraft used in international commercial aviation are 0% VAT. Dry leases (no crew) and wet leases (with crew) both qualify if the aircraft is used for international commercial transport. Lease payments for private/business jets not used in commercial international aviation are subject to 25% VAT, with no input VAT recovery for the lessee if used for exempt or non-business purposes.
• Aircraft depreciation: Aircraft (flyskrog, motorer) are depreciable assets under afskrivningsloven. Commercial aircraft are depreciated at a maximum rate of 25% declining balance (saldoafskrivning). Aircraft engines may be depreciated separately at the same rate. The depreciation basis is the acquisition cost including VAT (where VAT is a real cost) or excluding VAT (where input VAT is recovered).
• Withholding tax on cross-border lease payments: Lease payments made by a Danish lessee to a non-resident lessor for aircraft are generally not subject to Danish withholding tax — aircraft leasing is treated as a business profit rather than royalty income under most Danish tax treaties and domestic law. The lessor is subject to Danish corporate tax only if it has a permanent establishment in Denmark. Most international aircraft lessors structure to avoid Danish PE.

Crew Taxation and Residence

• International crew — 183-day rule: Flight crew (pilots, cabin crew) employed by an international airline and working on international routes are generally taxable in Denmark only if they are Danish residents or spend more than 183 days in Denmark in any 12-month period (under most Danish tax treaties, following the OECD model Article 15(3)). Crew residing in Denmark but working international routes are taxable on their worldwide employment income in Denmark.
• Article 15(3) — crew on ships/aircraft: Under the OECD Model Tax Convention Article 15(3), crew remuneration for employment exercised aboard aircraft in international traffic is taxable only in the country of effective management of the airline. This overrides the general 183-day rule. Danish-resident crew working for a foreign airline whose effective management is outside Denmark must rely on the applicable tax treaty to determine which country taxes their salary.
• Social security — A1 certificates: Crew working on international routes must carry an A1 certificate (or equivalent) to determine their social security coverage. For crew resident in Denmark but working for a non-Danish airline, the posting rules under EU Regulation 883/2004 apply. Danish crew working primarily outside the EU must follow the relevant bilateral social security agreement.
• Layover and standby: Time spent on layover outside Denmark is generally treated as working time for tax purposes but does not change the residence status. Standby days at home (standby derhjemme) are considered Danish-source days for the 183-day count.
• Flight crew commuting: Crew who commute from Denmark to a base in another country face double taxation risk. The tax treaty determines taxing rights; the Danish commuter rules (pendlerregler) may apply if the crew maintains a home in Denmark and works abroad. See our Digital Nomad Guide → for remote worker cross-border principles.

MRO and Ground Services VAT

• Aircraft maintenance, repair, and overhaul (MRO): MRO services on aircraft used in international commercial aviation are 0% VAT when the services are supplied directly to the airline operating international flights (ML §5, stk. 1, nr. 5). The zero-rating covers parts and labour. MRO on private aircraft or aircraft used exclusively domestically is subject to 25% VAT.
• Ground handling services: Ground handling (baggage, ramp, de-icing, catering loading) at Danish airports is exempt from VAT when the service is directly related to aircraft operations and is required for the safety and operation of the aircraft. This exemption follows CJEU case law (C-33/11, Airmax). The ground handler cannot deduct input VAT on costs attributable to these exempt services, creating embedded VAT costs.
• Catering supply: Inflight catering (meals supplied to aircraft for passenger consumption) is 0% VAT when supplied as ship's stores for international commercial aviation. The 0% rate applies to food and beverages supplied to the airline for inflight service. Catering supplied to private aviation is 25% VAT.

CORSIA and EU ETS Carbon Costs

• EU ETS for aviation: Airlines operating intra-EEA flights must surrender EU ETS allowances for their CO₂ emissions. As of 2026, free allocation of allowances to airlines is being phased out, with full auctioning from 2027. The cost of purchased allowances is a deductible operating expense for corporate tax purposes.
• CORSIA: International flights (outside the EEA) are covered by CORSIA. Airlines must purchase eligible emission units (carbon offsets) for any emissions above the 2019 baseline. CORSIA offset costs are deductible operating expenses. The CORSIA baseline period is 2019–2020 (COVID-adjusted for most carriers).
• VAT on carbon allowances: Trading in EU ETS allowances and CORSIA eligible emission units is exempt from VAT under ML §13, stk. 1, nr. 11 (financial services). Brokerage fees for carbon trading are taxable at 25% VAT. Airlines purchasing allowances through exchanges pay no VAT on the allowance itself but pay 25% VAT on exchange and brokerage fees.
• SAF and CORSIA interaction: SAF usage reduces the number of CORSIA offsets required. The benefit of reduced offset costs is indirect (through lower compliance costs) and is not a separate tax credit. Airlines should model SAF costs net of offset savings when evaluating the SAF tax credit.

For general corporate tax compliance for aviation companies, see our Business Tax Return Guide →. For cross-border VAT on aviation services, see our VAT International Trade Guide →. For green tax reform and CO₂ tax, see our Green Business Tax Guide →.