Denmark proposes generous tax deduction for startup investors

As Trendsonline reported, the Danish government is planning to introduce new tax deductions which favor startup investors as a part of the 2020 plan. A new company tax deduction will make it easier for small enterprises to obtain venture capital by making the company more attractive for investors in the project proposals and business plans.

Entrepreneurs are increasingly spending more time and energy on pitching to the investors and not enough motivation is left for the product development. The government wants to change this, and will now introduce an investor deduction scheme targeted at investments in small enterprises.

The new tax law will allow startup investors to withdraw up to 650,000 DKK (87 000 EUR) in tax credits annually.

It should be attractive to be an entrepreneur, and with the government’s new proposal the interest to invest is expected to increase. With a tax deduction of over half a million DKK, both investors and individuals get better opportunities to invest in projects that require more capital.

The Danish government wants to encourage creation of more startups and is giving more opportunities to attract capital. The proposal will provide tax deductions of approximately 300 million DKK (40.2 m EUR) per year. However, the the new law will be in force only from 2016, as it has to match the EU regulations for the allowed state financial support.

Although it will take a long time until the tax law will be passed, it is pleasing that the government is determined to help with the entrepreneurial challenges.

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This article is in collaboration with Øresund Startups, originally by Liga Lagzdina. Øresund Startups is a news site focusing on startups in Copenhagen and the other cities around the Øresund strait; Malmö, Helsingborg and Lund. It was initiated by Karsten Deppert and covers news about startups and events from the startup scene. You can follow them at @Oresundstartups.
Danish Kroner image by shutterstock

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