Competitive framework

For Denmark to sustain and strengthen its growing position in global shipping, it is vital that the industrial political framework conditions are internationally competitive for the Danish shipping companies. “Blue Denmark”, which covers shipping companies, shipyards, manufactures etc., provides the basis for approximately 100,000 workplaces in Denmark, of which shipping companies account for 30,000. In addition, shipping is the second largest export industry in Denmark with foreign exchange earnings of about DKK 190 bn. in 2008. 

The Danish framework conditions for the shipping industry must be competitive on an international scale as well as in relation to other European countries. This is due to the fact that the primary activity of the Danish shipping companies is navigation between continents in direct competition with shipping companies from all over the world. The most typical competitors operate under very good competitive framework conditions. The Danish government has a good understanding of the international conditions that Danish shipping is subject to. Therefore, today’s framework conditions are generally satisfying; however, it is important to monitor the development of the competitive conditions.

No State aid

The EU's regulation on maritime State aid of 1997 establishes that Member States may not provide aid directly to shipping companies, and this is supported by the Danish Shipowners’ Association. Based on international competition within the shipping industry, it is permissible, however, to adjust financial burdens in particular with regard to taxation. The general resistance towards State aid also applies to ship construction, since this could lead to an overproduction of ships compared to the need of transportation at sea.

DIS and tonnage tax

In order to ensure that costs are kept at a competitive level, taxation must reflect that the typical competitor of Danish shipping companies pays very low taxes and has very low labour costs. The latter is accounted for in the form of the Danish International Ship Register (DIS), which entails that costs in connection with paying wages, which is one of the few costs that vary from flag State to flag State, are not taxed in Denmark.Net wages are paid which means that the wage level for each seafarer is high. 

In 2002, as in most competing States, a tonnage tax scheme regarding taxation of shipping companies was introduced in Denmark.

Read more about the Danish Tonnage Tax System here.