Date of publication
15 Jul 2011 13:57
To
To foreign companies who sell dutiable goods in Denmark
Case no.
2010-231-0038
For questions, please contact
72 22 18 18
Summary
A new duty on saturated fat in a range of foods have been imposed in Denmark. The new duty is imposed on dutiable foods which are manufactured in Denmark and on foods which are imported to the country in a raw form as well as when they are part of another food.

New duty on saturated fat imposed on certain foods in Denmark

Summary

A new duty on saturated fat in a range of foods, which make up the primary sources of the Danish population's consumption of saturated fat, has been imposed in Denmark. This newsletter is primarily directed at foreign companies who sell dutiable foods in Denmark.

The new duty is imposed on dutiable foods which are manufactured in Denmark and on foods which are imported to the country in a raw form as well as when they are part of another food.

With the new duty, Danish and foreign foods will have equal conditions. Foods, which are imported to Denmark, will have the same duties imposed as Danish foods.

It is the importer of foods manufactured abroad who is responsible for paying the duty. The importer needs specific information from the foreign supplier in order to both calculate and pay the Danish duty. The usual rules for distance selling still apply for those companies who sell foods through distance selling.

No duties are imposed on goods which are exported or used for the manufacturing of non-food products, such as animal feed and cosmetics. Additives, medicine and vitamins e.g. are not dutiable.

The law will come into effect 1 October 2011 and is imposed on the dutiable foods which arrive in Denmark on 1 October 2011 and thereafter.

Which foods are dutiable?

The duty on saturated fat is imposed on the weight of the saturated fat in the following foods (also called raw foods) which are defined with the help of EU's customs tariffs. The only exception is meat.

  1. Meat - See below
  2. Dairy products under the positions 0401-0406
  3. Animal fat under the positions 1501 - 1504 and 1516, which have been melted or in any other way extracted.
  4. Vegetable oil and fat under the positions 1507-1516
  5. Margarine and other foods under position 1517
  6. Substitutes for butter under position 2106
  7. Other foods which can be perceived as substitutes or imitations of the foods mentioned in points 1-6. The labelling is based on a total evaluation of their classification and use as well as how they are marketed. All types of meat, including organs such as liver, intestine etc., are included, and standard rates for the levels of saturated fat in the different types of meat have been fixed. See ?Special rules on meat" below.

Standard rates:

Food

Saturated fat per 100g

 Duty per kg.

Meat

Cattle

5,2

0,83

Pork

6,5

1,04

Lamb and goats

6

0,96

Horses, mules and donkeys

4

0,64

Chickens, hens and wild birds etc

2,5

0,40

Ducks and geese

12,1

1,94

Turkeys

0

0,00

Rabbits and hares

0

0,00

Other wild animals

1,6

0,26

Other types of meat

4,2

0,7

For other foods, see the customs tariffs on the EU commission's website.

A company, which produces one of the dutiable goods, must pay a duty on the saturated fat. An importer of dutiable raw foods also has to pay a duty the same way a foreign company with a turn-over of more than 280.000 DKK through distance selling has to. If the company has a turn-over of less than 280.00 DKK it is the recipient who must pay the duty.

Example 1: A dairy that produces cream in Denmark must pay duty on the amount of saturated fat in the cream.

Example 2: An importer who imports cream must pay duty on the amount of saturated fat in the cream.

Financial levy on saturated fat

Foods where dutiable raw foods are a part of the content are imposed with a financial levy. The financial levy is imposed on saturated fat in the raw foods which have been used in the production of the composite foods and are imported, introduced or sold through distance selling. Examples of composite foods are lasagne, cakes, and potato chips.

If raw foods have been used to produce composite foods the importer or the distance seller or recipient must pay the financial levy for the amount of raw foods that has been used in the production. This includes waste regardless of whether the waste occurs because the purchased foods are rotten or the amount of saturated fat diminishes during the production.

The importer or the distance seller or recipient must have a manufacturer's declaration from the supplier of the composite food to be able to calculate the amount for which a financial levy has to be paid.

Example: An importer of potato chips must pay a financial levy for the amount of oil used to produce the potato chips. The relevant amount is the amount used to boil the chips and not the amount of oil that is in the potato chips. So if 100 litres of canola oil is put into the pots then that is the amount the importer has to pay a financial levy on.

A minimum amount - A content of saturated fat of 2,3 % and less is exempted from the duty

Raw foods which contain 2,3% of saturated fat or less, are exempted from the duty. This also applies when they have been part of the production of a composite food. If the raw food contains more than 2,3% saturated fat duty must be paid. This is also the case even if the composite food ends up containing less than 2,3g of saturated fat.

Example 1: Skimmed milk with a content of saturated fat under 2,3% are exempted from the duty on saturated fat. If a company purchases skimmed milk for the production of their smoothies it does not have to pay a duty on the saturated fat upon purchase, because the skimmed milk contains less than the minimum amount of 2,3%.

Example 2: A company imports smoothies where skimmed milk has been used in the production. The importer is not obliged to pay a financial levy on the smoothie, since the content of saturated fat in the skimmed milk is under the minimum amount. Neither is he obliged to pay a financial levy if the smoothie's total amount of fat is larger than 2,3% as a result of the use of corn and egg in the production. The saturated fat in corn and eggs is not dutiable.

Example 3: A company imports smoothies where oil has been used in the production. The importer must pay the financial levy on the saturated fat in the oil since the oil's content of saturated fat exceeds the minimum amount. The importer must pay the financial levy on the oil even though the smoothie's total content of saturated fat is below 2,3% because the other ingredients cause the percentage to diminish.

What is the duty rate?

The rate is 16 DKK per kilo saturated fat for both raw foods and for raw foods used in the production of a composite food. Therefore, both the duty on the saturated fat as well as the financial levy is 16 DKK per kilo saturated fat.

Registration

Companies, who produce taxable raw foods in Denmark, must be registered as the warehousekeepers.

Companies, who receive the dutiable foods (raw foods) in Denmark from another EU country or who introduce the food from a country outside the EU have to be registered as recipients and must pay duty on saturated fat.

Companies who receive foods where dutiable raw foods have been used in the production of the imported food (composite food) from another EU country or import the food from a country outside the EU, also have to be registered as a recipient of dutiable foods and must pay a financial levy.

A company, who is registered to pay the duty on saturated fat, also has to be registered to pay a financial levy if the company imports composite foods.

Companies, who are registered for distance selling (with reference to the Value Added Tax Act) because the total delivery to non-businesses in Denmark exceeds 280.000 DKK, must also be registered and they must also pay a duty for the saturated fat and/or a financial levy for the distance sales.

In order to give Danish companies the same conditions as foreign companies, there are some voluntary registration possibilities for companies who produce foods in Denmark.

Registration must take place before the dutiable activity is started.

How is the dutiable amount calculated?

A company can use several methods to determine how much duty it has to pay.

Raw foods

In principle, the company can use the content declaration, if the food is equipped with one.

It is also possible to use the public food declarations in the Danish food database, which contains the median of saturated fat in a list of foods. Read more at www.foodcomp.dk.

Finally, it is possible to do a technical analysis of the food, which can document the level of saturated fat.

Composite foods

Regarding composite foods, the importer or distance seller or recipient must have a manufacturer's declaration from the supplier of the composite food to be able to draw up the dutiable amount.

There are no formal criteria for the manufacturer's declaration. The essential part is that the declaration contains the information necessary for the importer or distance seller or recipient to calculate the correct duty.

The manufacturer can do either one of two things. He can inform of the level of saturated fat in the dutiable raw foods which have been used in the production of the composite foods. If the foods can be found in the food database, he can also choose to inform of the amount of raw foods used in the production, so the importer or distance seller/recipient can look up the content of saturated fat and then draw up and pay the duty.  

Rules used if the level of saturated fat cannot be given

 If the level of saturated fat cannot be given, a charge based on the total content of fat (saturated as well as non-saturated) must be paid. If that is not a possibility either, the duty will be based on the net weight of the food.

Special rules on meat

Special rules apply to meat. As a rule of thumb, the law's appendix 1 is used on most deliveries of cut meat. The appendix fixes the median level of saturated fat in each type of meat. The median rates of the content of saturated fat are listed in the law's standard rates above.

If halved, quartered or roughly cut animals, which have to be processed before being sold to retail, are delivered, the butcher is allowed a deduction on the dutiable amount. He may deduct 27, 5% if the meat is pork and 25% for other types of meat.

However, the butcher may choose to pay the tax according to the level of saturated fat in the individual pieces, when the pieces are delivered to retail. In that case, the method has to be used consistently on every piece sold to retail apart from halved, quartered or roughly cut pieces with reference to the above mentioned method. The method is binding for a minimum of 1 year.

The duty will come into effect as of 1 October 2011.

The law will come into effect on 1 October 2011 and will apply to dutiable foods being imported to Denmark on 1 October 2011 and thereafter.

Further information

If you have any further questions you are welcome to contact SKAT on ( 45) 72 22 18 18.

www.skat.dk is your access to the self-service system and guides on taxes and duties of the Danish Customs and Tax Administration