LEGISLATION
On this page you can find some answers to frequently asked questions about legislation and
taxation in relation to company cars.
| COMPANY NAME OR LOGO ON CARS WITH YELLOW PLATES | REGISTRATION TAX | INCREASES AND REDUCTIONS IN THE REGISTRATION TAX |
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| As of 1st January
2013 it will be a requirement that cars with yellow license plates must bear a visible company
name or logo and company registration number. Read more |
2008 saw the introduction of a new act on proportional payment of registration tax, allowing the leasing companies to limit payment of registration tax to the lease period for the vehicle. Read more. | The registration tax varies according to the vehicle’s fuel consumption and safety standards. Read more. |
| TAXATION OF COMPANY CARS USED IN TWO COUNTRIES | USING FOREIGN REGISTERED CARS IN DENMARK | VAT ON CARS |
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| If you work in two countries, or if you live in one country and work in another, you can avoid being taxed twice for your company car. A double taxation agreement could be your best bet. However, every situation is different, so make sure you examine every aspect. | As a general rule, you cannot use a foreign-registered car in Denmark unless you pay the Danish registration tax. This applies equally to leased vehicles. Read more. | Part of the VAT on the lease payment for private vehicles used as company cars is deductible. The deduction cannot be more than 25% of taxable amount. Read more. |
| VAT ON COMMERCIAL VEHICLES | VAT IN OTHER EU COUNTRIES | TAXATION OF COMPANY CARS |
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| As a private company, the VAT you pay for leasing/renting and running a commercial vehicle is fully deductible – provided you only use it for business purposes. Read more. | When Danish companies lease cars from other EU countries, they must pay VAT themselves at Danish rates. This removes any advantage in leasing from a country like Germany – under the old rules you could claim back all the German VAT. Read more. | If your company car is rented or leased by your employer, you are taxed as if the employer had purchased the car. Read more. |