The government failed to gather the necessary support in the Danish parliament, Folketing, to fund a prison it planned to rent in Kosovo due to a row over an EU-imposed tax.
In December 2021, Denmark signed an agreement with Kosovo to rent a prison in the town of Glijan, 50 kilometres south of the capital Pristina, to relocate 300 inmates sentenced to deportation.
But on Thursday (9 May), the Social Democrat government failed to receive the necessary funds from parliament despite a broad political consensus across the aisle.
Far-right Danish People’s Party, the right-wing Conservatives, and liberal Left declared that they would vote against the funding – even though they signed the agreement back in December.
“The Danish People’s Party and the Conservatives are running away from the agreement they made,” said tax minister Jeppe Bruus.
The problem stems from an interpretation of an EU legislation which, according to the Danish government, requires financing parts of the agreement for the Prison Service with money from a new VAT on art and culture copyright licences.
But contrary to what officials in Denmark’s tax ministry and justice ministry have concluded, lawyers from the Gorrissen Federspiel law firm stated that Denmark does not need to introduce such a new tax.
“Our assessment is that EU law – contrary to what is assumed in the bill – does not require the granting of copyright licences to be subject to VAT when the licence is granted by someone other than the author or artist himself,” Gorrissen Federspiel told broadcaster DR.
“We have a reasonable suspicion that it is not necessary. We don’t have to do it if we haven’t received a letter of formal notice from the EU, so we can wait and see,” said the Left party’s tax spokesperson Louise Schack Elholm.
“If a letter comes, the Left is prepared to ensure that Danish law complies with EU law,” she added.
The Conservatives shared the same opinion, according to the party’s spokesperson Mette Abildgaard. “We have always said very clearly that we will only introduce this VAT if we are obliged to do so by the EU – and there are many indications that we are not,” she said.
“As long as there are doubts, we want to give taxpayers the benefit of the doubt,” she added.
As for financing the prison places in Kosovo, €19.6 million (200 million kroner) will have to be found elsewhere. (Charles Szumski | EURACTIV.com)
