New act on taxation of company cars has been passed
The tax base for a company car has so far been defined as the car's purchase price.
A majority in the Danish Parliament has now decided that it prospectively from month four and onwards must be the market price that defines the tax base of a company car.
This means that we from now on can state the tax base for the first three months. From month four and onwards, the tax base will be a technical new car price that follows the statutory recalculation, which has been taking place since 3 October 2017. The recalculation is done by documenting the car's market value, at the latest when the car is four months old. To calculate the technical new car price, this market value is discounted to the first registration date of the car, and thus the technical new car price is obtained.
This results in a natural uncertainty about the size of the tax base as of month four, as the calculation is based on a market assessment that is not known at the signing of the lease agreement.
In NF Fleet, historical recalculations show that a typical company car such as Ford Mondeo, VW Passat, Mercedes C-Class, Audi A4 and Volvo V60 will increase between DKK 150 and 500 after tax. month.
We are working on being more accurate in our estimates, but will always be limited by the fact that it is a market assessment that forms the basis of the recalculated tax base.
The new rules apply to anyone who changes a car from 1 February 2020, regardless of the order date and whether it is a brand new car or a car taken over from a colleague. However, cars that are taken over will not be affected, if the first registration date is before 3 October 2017.
It is important to emphasize that company car users, who have been taxed on their company car in January 2020 or earlier, will not be affected by the new legislation.
The lease payment will continue to be fixed throughout the contract period. The new legislation does not change this.
Relaxation of the taxation of eco-friendly cars
In 2020, a special tax deduction of DKK 40,000 is introduced for both electric cars and plug-in hybrid cars. The deduction applies for the period from 1 April to 31 December 2020. Specifically, up to DKK 3,333 can be deducted in the monthly gross taxation. There is no purchase date requirement, so electric cars and plug-in hybrid cars already registered also benefit from this deduction. This deduction is only valid for 2020 in accordance with the adopted amendment, and there is thus no guarantee that the deduction will continue in 2021.