Tax, VAT and fees

Let us run the numbers for you

LeasePlan are experts in taxation rules for all kinds of vehicles. We keep you updated about the latest legislation and are aware of what's next within this area.

We know it sounds like it, but it's not really that difficult, for example, to calculate the tax on a foreign registered car in Denmark. You will find more about that and other related topics on this page.

If you have questions about tax and VAT that you do not find answered here, you are very welcome to contact us.

Taxation of company car

Is the vehicle new, or no more than three years old?

If the vehicle is new, or no more than three years old, calculated from the 1st registration date when it is made available as a company car, the taxable value is the new vehicle price. The new vehicle price for a leased car is the price that emerged when the car was recalculated, called the recalculated technical new price. The three years are calculated from the time of first registration, and the following 36 months incl. registration month.

If your leasing agreement expires later than 3 years after the 1st registration date, the taxable value decreases by 25% from the 37th taxation month. However, the taxable value is always at least DKK 166,000.

Is your vehicle more than three years old?

If the vehicle is bought or leased more than three years after the first registration date, the car's purchase price is used as the taxable value, but at least DKK 160,000.

Is your vehicle registered for the first time on 1st of February 2020 or later?

For vehicles registered for leasing for the first time on 1st of February 2020 or later, and where a recalculation of the vehicle's value has been carried out, it is the recalculated technical new price that is used as the tax value. However, the value cannot be lower than the price at 1st registration. The recalculated value must be used, from and including the month in which the recalculation was made, and until three years after the vehicle's first registration, however a driver who has had the car from new is taxed for a maximum of 36 months, from the 37th taxation month taxation falls as described above.

Is your vehicle registered for the first time before 1st of February 2020?

For vehicles registered for leasing for the first time before 1st of February 2020, the taxable value is the first 36 months of the leasing company's purchase price.

If your leasing agreement expires later than 3 years after the 1st registration date, the taxable value falls by 25% from the 37th taxation month. However, the taxable value is always at least DKK 160,000.

If a new leasing agreement is entered into on the car after the car has become 3 years old, the tax base will be the car's market price. However, the taxable value is always at least DKK 160,000.

Taxation on cars

LeasePlan always refers to Skat's guidance for free car for employees (company car).

You can read more via Skat's website (in Danish)

Car in multiple countries

If you have employees in your company who work in several countries or live in one country and work in another, the company car will often be taxed in both places. It is therefore important that you find a solution from the very start, which takes these circumstances into account and, if necessary, make an agreement on double taxation.

As a general rule, cars registered overseas must not be used in Denmark without Danish registration tax being paid on them. This also applies to leased cars.

There are exceptions, where it is permitted for a person with an address in Denmark to use a car registered overseas here in Denmark.

Contact LeasePlan, if you have other questions regarding cars in multiple countries.

Tel. +45 3673 8300 Email: lp@leaseplan.dk

VAT deduction when leasing a passenger car (white registration plates)

When leasing a passenger car for commercial use, part of the VAT on the leasing costs is deductible.

Lessor/leasing company must state how much of the VAT amount is deductible on the invoice or at least make the figures available.

Condition for deductibility

It is a condition that the leasing period for each car is at least 6 months (consecutive), and that at least 10% of the yearly usage of the leased car concerns the company’s VATable activities. Generally, it is not a requirement that a log is made available, however the company should be able to provide evidence that the vehicle is used for the purposes of the VATable business for at least 10% of its total usage.

Jacob Holme, Senior Manager PwC Mobil: 2328 8775 E-mail: jho@pwc.dk

VAT when leasing a van (yellow plates)

VAT on leasing payment as well as operation costs are partially deductible if used in relation to the purpose of the business, the VAT deductible will depend on the use of the vehicle.

Jacob Holme, Senior Manager PwC Mobile: +45 5183 8107 E-mail: jho@pwc.dk

Be aware

  1.  
    Day ticket for driving with yellow registration plate

    A day ticket permits you the private use of a vehicle with a yellow plate registered for goods transport (business use) and with a total weight of up to 4 tonnes. The day ticket is valid for 24 hours, from 00.00 (midnight) until 23.59, and you can purchase a maximum of 20-day tickets for the same vehicle during one calendar year.

    Read the specific rules and buy day tickets here

  2.  
    License plates have to be screwed on

    From 15th November 2015, all licence plates on cars and vans must be securely fastened with at least two screws. The screws must be covered with a tight-fitting cap in the same colour as the place on the licence plate where the screw is fastened.

  3.  
    Name and company registration number on yellow-plate cars

    Current requirements state that yellow-plate cars must feature their company name or logo and central business reg. no. You can read more about details concerning required lettering sizes and placement in this PDF.

Disclaimer

The information contained in this document is for general guidance on matters of the reader’s interest only. The application and impact of laws can vary widely based on the specific facts. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in information contained in this document. This document is therefore provided on the understanding that PwC is not herein engaged in rendering tax or other professional advice and, consequently, the information should not be used as a substitute for consultation with professional advisers. Before making any decisions, you should consult a professional adviser at PwC.

PwC is not responsible for any errors or omissions contained herein or for the results obtained from the use of this information. All information is provided with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. In no event will PwC, its partners and employees be liable to you or anyone else for any decision made in reliance on the information in this document.

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