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

  1.  

    How much is the tax, and what is the leasing fee? Two of the most typical questions, when an employee must decide whether their next car should be a company car. Luckily, these can be answered fairly quickly - for example by using the calculator at pwc.dk (Danish)

Taxation of company cars

Vehicle less than 36 months old when the leasing agreement is signed.

The taxable value of a free company car is calculated as 25% of that part of the value of the vehicle that does not exceed DKK 300,000 and 20% of the remainder. The taxable value is always calculated on the basis of at least DKK 160,000.

An environment tax is added to the taxable value for the company car equal to the annual environment ownership tax paid by vehicle owners, with an addition of 50%.

The value does not including the balancing allowance for diesel vehicles, nor is any allowance for private use included.

Where a vehicle is older than 36 months, the taxation is calculated from first registration and the employee is taxed on the new vehicle price. This taxation is to be applied for the first 36 months of the vehicle life.

From month 37, the taxable value is reduced to 75% of the new vehicle price, with a minimum of DKK 160,000. This value includes the environment tax mentioned above.

Vehicle more than 36 months old when the leasing agreement is signed.

Where a leasing agreement is commenced more than 36 months after the original vehicle registration, the employee will be taxed on the market value, this typically being the trade price of the vehicle.

As with newer vehicles, the taxation is augmented by an environment tax, whether the vehicle is leased or owned by the employer.

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

Download PDF with legislation

Download PDF with legislation

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: LDJ@pwc.dk

  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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