The real problem is actually less the exact rate of 25%, but rather that most of the systems only assume one rate. Denmark was the first country to introduce a general VAT in 1967, and whilst the rate has changed (last in 1992 to 25%), the number of rates have not. So lowering the general VAT rate would likely be possible in a 1-3 year time frame (depending on unknown factors), but lowering the general VAT rate would be a significant loss on state finances (thus not interesting to politicians) (and as someone else pointed out, it mostly favours high spenders, which is also politically dicey).
However, introducing a split rate would definitely require a time frame of at least 4 years, and no politician are willing to wait that long for a politician win.
> The real problem is actually less the exact rate of 25%, but rather that most of the systems only assume one rate.
This can’t be the case.
You have to apply the VAT of their own country to customer from other part of the union and some services are exempt.
In all likelihood, most systems in Denmark already supports using different VAT for different products. Plus, most accounting systems won’t be Denmark specific anyway but simply configured for it.
Can someone explain to me why I do sit at -2 on a perfectly factually valid comment? Is VAT so foreign to American they are actually lost by how intra-community purchases work and how VAT is collected? Are the Danes here simply never exporting anything?
However, introducing a split rate would definitely require a time frame of at least 4 years, and no politician are willing to wait that long for a politician win.