L90 - Relaxation of legislation concerning eco-friendly cars

One very positive change was announced by the government last week, as an agreement was made to give direct tax savings on environmentally friendly cars made available to employees in the period of 1st April 2020 to 31st December 2020. This direct saving is given as a reduction in the annual taxable value on EVs and plug-in hybrids.

A reduction of DKK 40.000 is applied to the annual taxable value resulting in a direct tax saving of DKK 3.333/month. This means that if an EV or plug-in hybrid has been made available to an employee, with monthly taxation of DKK 7.333, the reduction will result in a monthly taxation of DKK 4.000 in the period.

This reduction is given to all employees for whom an EV or plug-in hybrid has been made available by their employer, between 1st April 2020 and 31st December 2020.

This reduction also applies regardless of whether the employee has installed a charger at their home address. The taxation on a charger made available to an employee follows the existing legislation and is thus included in the calculation of the taxation.

Also see L91 - Tightening of legislation on taxation of company cars