ARTICLE
3 October 2025

VOD Providers To Pay Cultural Contributions As From 2025 Under The Danish Act On Cultural Contribution

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According to the Act on Certain Media Service Providers' Contribution to Promote Danish Culture, also known as the Act on Cultural Contribution, providers of on-demand audiovisual media services must make an annual payment to the Danish State of 2% of their turnovers in Denmark stemming from the on-demand services and an additional 3% if the investment in new Danish content is below 5%.
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According to the Act on Certain Media Service Providers' Contribution to Promote Danish Culture, also known as the Act on Cultural Contribution, providers of on-demand audiovisual media services must make an annual payment to the Danish State of 2% of their turnovers in Denmark stemming from the on-demand services and an additional 3% if the investment in new Danish content is below 5%.

The obligation to pay such cultural contribution is imposed on all on-demand media service providers established in Denmark or in any otherEUMember State provided that the on-demand media services are directed at a Danish audience.

The AVMS Directive

The basis for this is Article 13(2) of the AVMS Directive according to which financial contributions imposed on media service providers established in another Member State targeting the Member State's territory must be proportionate and non-discriminatory.

The explanatory notes to the Act on Cultural Contribution emphasise that the contribution rates of 2% or 5% are proportionate, that they generally follow the level for such rates in other EU Member States, and that the contribution is justified as Denmark is a small language area and the market for Danish content is similarly of limited size.

History

On 19 December 2023, the Danish Parliament first passed a bill on the Act on Cultural Contribution. However, due to a procedural irregularity, the EU Commission had not been notified of the legislation in time; the bill did therefore not receive royal assent, and the legislative process had to be repeated.

Consequently, a bill for the Act on Cultural Contribution was put out to a second round of public consultation with deadline on 1 March 2024. It waspresented in Parliament on 12 April 2024 and then presented to the EU Commission providing its comments on 2 May 2024. The bill wasadjusted to comply with these comments, presented again in Parliament and finally passed by Parliament on 30 May 2024.

EU Commission decision in July 2024

In its decision of 25 July 2024, after the Act came into force, the EU Commission determined thatthe Act does not constitute state aid. This is also in line with the Danish Ministry of Culture's previous evaluation. However, the Act was notified to the EU Commission to ensure legal certainty.

Exemption of sports, news, linear and public service activity, etc., from the obligation to pay cultural contributions

Sports and news programmes are exempted from the payment of cultural contributions.

Furthermore, revenues fromlinear programming servicesare exempted. It should be noted that the contribution applies to broadcasters providing VOD services insofar as the revenues from the VOD services are concerned.

Thus, only on-demand contentis included and, in the case of mixed services, the contribution concernsthe on-demand content only,not the linear content, including integrated catch-up as part of the linear services.

In its response in connection with the consultation of the Act in February 2024, Netflix, among others, criticised the exemption of linear programming services and noted that the Act implies a discrimination against the VOD sector.

Furthermore, on-demand media services offered in the course of public service activity are exempted from payment of the contribution, including both services from Danish public service broadcasters such as DR and the regional TV 2 stations and services offered in the course of public service activity from providers established in another EU Member State.

Revenues from theredistribution of other media service providers' VOD servicesare also exempted from payment of the contributory turnover.

Finally, media service providers with an annual turnover below DKK 15 million (EUR 2 million) or a small audience (less than 1% of the total number of users of on-demand media services) on the Danish market are exempted.

The EU Commission's evaluation of exemptions

In its decision of 25 July 2024, the EU Commission found it acceptable that the cultural contribution is structured in such a way as to encompass only part of the turnover.

The Commission found that sports and news programmes, which are exempted, do not fall under the categories of audiovisual content (films, series and documentaries) which the cultural levy aims to support. Therefore, the exemption of those programmes from the contributory turnover, even if they are made available through a VOD service, is "consistent with the levy's objective to support the production of new Danish films, series and documentaries".

As to the exemption of linear programming services, the Commission found in its decision that "it is also consistent with the underlying logic of the levy". The Commission referred to the information provided by Denmark that VOD services are not subject to the same content-related obligations as linear services, and that public-service broadcasters, representing the large majority of linear viewing in Denmark, are already subject to extensive obligations to invest in and broadcast Danish audiovisual content. Therefore, the Commission found that their exemption from the contributory turnover is "consistent with the levy's objective to address the gap in the contribution to the production of Danish audiovisual content" between linear and VOD services.

The Commission found in its decision that the exemption of revenues generated through "the mere redistribution" of other VOD services from the contributory turnover "ensures that media service providers are not required to pay for revenues from services for which they do not have editorial responsibility and of which they are not providers within the meaning of the Act". Furthermore, "[i]t also aims to avoid double payment of the levy" for the same VOD services.

When is an investment considered to be in new Danish content?

As for investments in new Danish content, the explanatory notes set out that this is to be understood broadly as including films, series and documentary genres, including reality, comedy and drama, and as investments in new productions, but not sports content or news. In addition, the acquisition of rights to exploit new productions counts as investment in new Danish content, whereas investments in rights in already existing content, for example the acquisition of production companies' so-called back catalogues, do not.

An investment is deemed to be an investment in Danish content provided that 75% of the production material for European films, series and documentaries is in Danish and more than 50% of the production budget is spent in Denmark or more than 50% of the production is physically filmed in Denmark.

In its comments from May 2024, the EU Commission found these territorial demands problematic in relation to the free exchange of services in the internal market. Therefore, the territorial demands were removed from the bill in May 2024 before its enactment.

Thus, the demands as to where the production budget should be spent and where the production should take place were deleted.

The EU Commission also criticised the demand for 75% Danish production material and the demand that investment should be in "new" content, but the bill was not amended accordingly.

The investments may be distributed as an average over a three-year period.

Registration and payment as from 2025

Following the endorsement by the EU Commission on 25 July 2024, the Act on Cultural Contribution was upheld, and the cultural levy may be collected for the first time in 2025 (deadline 31 March 2025) for the 2024 turnover.

Media service providers must register with the Agency for Culture and Palaces under the auspices of the Danish Ministry of Culture.

Media service providers must provide annual reportsof their Danish turnovers and investments in new Danish content (confirmed by a statement from an independent auditor) to the Agency for Culture and Palaces to the effect that the Agency may decide on the turnover subject to cultural contribution and charge the cultural levy from the media service providers.

Use of the cultural contribution funds

The net proceeds of the contributions are expected to bedistributed with 20% to support public service purposes (documentaries and series) and 80% to be used for film-funding purposes (feature productions and series) to be finally decided when such proceeds are known. Media service providers that pay the contribution may subsequently apply for funding for the production of new Danish audiovisual content from these national aid schemes. The Danish Ministry of Culture has assessed conservatively that the annual cultural contribution will total approx. DKK 98 million (EUR 13 million).

Read the 2 February - 1 March 2024 consultation response (Netflix consultation response on pages 38-43) here.

Read the EU Commission's comments of 2 May 2024 here.

Read the letter of 25 May 2024 from the Danish Minister of Culture to the Danish Parliament's Culture Committee regarding state aid here.

Read the Act on Certain Media Service Providers' Contribution to Promote Danish Culture (the Act on Cultural Contribution) as adopted by the Danish Parliament on 30 May 2024 here.

Read the EU Commission's decision of 25 July 2024 here.

Click here to go to the website of the Agency for Culture and Palaces for registration, etc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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