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Denmark upstream fiscal summary

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11 October 2018

Denmark upstream fiscal summary

Report summary

Danish licences operate under a concession fiscal regime. The last licensing round took place in 2014. The fiscal terms are not biddable or negotiable. The current fiscal regime comprises corporate income tax (25%) and an additional profits tax, known as the hydrocarbon tax (52%). Corporate income tax is deductible from the hydrocarbon tax so the effective tax rate is 64%. From 2005, the Danish state holds a 20% equity stake in all new licences via Nordsoefonden. In 2017, the parliament approved a number of hydrocarbon tax incentives mainly to help the major Tyra gas hub redevelopment. The incentives include a higher capital uplift and an accelerated depreciation for capital costs incurred between 2017 and 2025 (inclusive).

Table of contents

  • Executive summary
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring fencing
      • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
      • Corporate income tax
      • Hydrocarbon tax (additional petroleum tax)
      • Fiscal treatment of decommissioning costs
      • Product pricing
      • Summary of modelled terms
    • Recent history of fiscal changes
    • Stability provisions
    • Split of the barrel and share of profit
    • Effective royalty rate and maximum government share
    • Progressivity
    • Fiscal deterrence

Tables and charts

This report includes 18 images and tables including:

  • Revenue flowchart: Denmark Concession
  • Timeline
  • Timeline details
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate and minimum state share
  • Maximum government share and maximum state share
  • State share versus Pre-Share IRR - oil
  • State share versus Pre-Share IRR - gas
  • Investor IRR versus Pre-Share IRR - oil
  • Investor IRR versus Pre-Share IRR - gas
  • Bonuses, rentals and fees
  • Indirect Taxes
  • Depreciation schedule
  • Surtax
  • Denmark Concession

What's included

This report contains:

  • Document

    Denmark upstream fiscal summary

    PDF 819.51 KB

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