Denmark seems likely to avoid falling foul of the EU’s three per cent convergence criteria for 2011 after new calculations suggest the Pensions Yield Tax will lower the 2011 deficit from four per cent of GDP to under three per cent.

“A quick calculation shows that the state will recover some 45 to 50 million kroner through the Pensions Yield Tax in 2011,” CEO of AP Pension tells Jylalnds-Posten.

The figures have been confirmed by the pension companies’ trade organisation Forsikring & Pension.

The government has otherwise only budgeted with revenues of DKK 12 billion, but can now expect DKK 35 billion extra. ATP alone will be paying DKK 18.3 billion in Pension Yield Tax for 2011.

The pension yield tax in 2011 was at 15 per cent of the return on a deposit, including any adjustments, and is automatically deducted and paid to the tax authorities by the pension company. 15 per cent of the interest is deducted from any Individual Customer Capital. The tax has been increased in 2012 by the current government to 15.3 per cent.

Finance Minister Bjarne Corydon is delighted that the deficit looks like being lower than initially calculated.

“It’s still too early to say what the overall pension tax will be. But it is clear that ATP’s accounts for 2011 indicate that it will provide much more than originally calculated,” Corydon says, but adds that nonetheless, Denmark may end up above the EU threshold.

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