Solar Tax Dodged in Denmark

COPENHAGEN – Local municipalities across Denmark are skipping out on taxes owing for the solar energy that they have generated.

A new report issued last week in Denmark indicates that a significant number of solar power cells installed by local municipalities around the country are not properly registered, and result in underpaid taxes.

Under the current legal requirements, if solar panels are installed for mass power generation as part of a new development or a significant renovation, then those panels must be administered in a corporate entity that is separate to the one administering the rest of the development.

The power generated using the panels must then be purchased by the first entity, and the appropriate tax rates must be applied to the sale.

By not separating out the administration of the solar panels, as many as 267 municipalities have underpaid their tax obligations thought out the country.

Some experts have claimed that the tax treatment of the solar cells will result in some of the sites being decommissioned due to the negative impact of the onerous taxes.

However, the Energy and Climate Minister Lars Christian Lilleholt said that he did not want to see any sites closed, but added that “…green investments must not be driven by speculation in tax avoidance through illegally installed solar energy panels.”