When you are a user of a company car, it is important to know the applicable rules regarding taxation, VAT and green tax for company cars. We give you the overview here. Unfold the tabs to learn more.
Taxation of company car
- The taxable value of a company car is calculated as 25% of the car's tax base up to DKK 300,000 and 20% of the remaining value
- The minimum tax base is DKK 160,000.
- An environment fee must be added to the taxable value (see under Environment fee below)
- A special tax deduction of up to DKK 40,000 applies to electric cars and plug-in hybrid cars in 2020
Calculation of the tax base
The tax base for a company car is defined by the car's purchase price for the first three months. From month four onwards, the tax base will follow the market price and will therefore be a technical new car price that follows the statutory recalculation, which has taken place since 3 October 2017. The recalculation is made 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 back to the car's first registration date, and thus the technical new car price is obtained.
Please note that the rules for calculating the tax base have been changed as of 1 February 2020, and the change therefore applies to everyone who changes cars from that date, regardless of the order date and regardless of whether it is a brand new car or a car that is 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.
Tax base for contract extensions
When re-leasing or extending a leasing contract where the car was at least 36 months old at the time of entering into or extending the contract, it has hitherto been current practice to calculate the tax base as 75% of the new car price. As a result of a decision by the National Tax Board, this practice is now changed, and thus the car's current market value is used as a tax base for leasing cars over 36 months that are re-leased or where the leasing contract is extended.
If the contract conditions are unchanged during the leasing period, the tax base is reduced to 75% of the original tax base when the car is +36 months.
Used company car
A used car that is more than 3 years old (i.e. over 36 months) is valuated in terms of tax to the market price incl. delivery costs as well as expenses in connection with refurbishment and maintenance.
In case of self-payment, i.e. that you as an employee pay part of the leasing payment yourself, the taxable value of the company car is reduced by the amount paid. The reduction can take place in either your gross and / or net salary. A reduction in the net salary brings a corresponding reduction in the monthly taxable value.
Taxation of eco-friendly cars
In 2020, a special tax deduction of DKK 40,000 will be introduced for both electric cars and plug-in hybrid cars, which corresponds to a deduction of up to DKK 3,333 in the monthly gross taxation. There is no requirement to the date of acquisition, so electric cars and plug-in hybrid cars that are already registered will fortunately also benefit from the deduction.
According to the approved amendment, the deduction is only valid from 1 April to 31 December 2020, which means that at present there is no guarantee that the deduction will continue in 2021.
An environment fee must be added to the taxable value of a free car. Please note that the environment fee has been increased with 50% as of 1 January 2013.
For cars and vans covered by the rules on green tax:
- Vans registered for the first time on 18 March 2009 or later is transferred to green tax
- The environment fee for petrol cars corresponds to the annual green tax for the car
- The environment fee for diesel cars corresponds to the annual green tax for the car, however, less the green settlement tax
For vans covered by the rules on vehicle excise duty:
For vans registered for the first time before 18 March 2009, the rules at the time for vehicle excise duty apply, and the environment fee for vans corresponds to the vehicle excise duty - however without any private usage surcharge
VAT rules for white plate cars
For cars on white plates, the company can deduct VAT. To be entitled to the VAT deduction, the following conditions must be met:
- At least 10% of the driving has to be commercial
- The leasing contract must have been entered into for a consecutive period of at least 6 months
The VAT deduction, which we always state, is calculated on the basis of the car's registration tax, cf. the example below.
The VAT deduction for the first three calendar years: Registration tax x 2% x 25%.
The three years are calculated from the car's first registration date.
After that, the VAT deduction amounts to: Registration tax x 1% x 25%
Example: Brand new car with a registration tax of DKK 150,000.
The first three calendar years: DKK 150,000 x 2% x 25% = DKK 750 (per month)
Hereafter: DKK 150,000 x 1% x 25% = DKK 375 (per month)
VAT information on the invoice
Contact NF Fleet's accounts department on +45 88 44 40 00, if you want detailed information on VAT information on the invoice, including VAT for extraordinary lease payments.
VAT rules for yellow plate cars
The VAT rules for yellow plate cars vary depending on whether the car is used exclusively for commercial driving or whether the car is also used for private driving.
Commercial driving only
For yellow plate cars used exclusively for commercial driving, the company can deduct the full VAT. This also applies to VAT on any deposit, an extraordinary lease payment as well as operating costs.
For yellow plate cars that are also used for private driving, i.e. combined driving, the company can deduct one third of the VAT. The full VAT can still be deducted from the operating costs.
If you wish, NF Fleet can manage the payment of vehicle excise duty/green tax for your leasing cars. However, the cost is still imposed on the lessee, i.e. you or your company, and we therefore invoice the amount to you, but it is not included as part of the lease payment.
When a car is registered, NF Fleet is listed as owner and lessee as user, i.e. you or your company. If a re-registration of the car is made, e.g. if the number plates are stolen, SKAT will send you a new invoice.
You can send the invoice for vehicle excise duty/green tax to NF Fleet - then we will arrange payment and at the same time register the payment to Nets, so that you as the lessee do not receive the succeeding invoices. The cost of vehicle excise duty/green tax will be re-invoiced from NF Fleet to you.
If information is to be sought regarding reimbursement, SKAT is of the opinion that they will not inform NF Fleet about this, as SKAT will only communicate with the user of the car, because it is the user who must settle vehicle excise duty/green tax and receive a possible reimbursement amount. Please note that SKAT can deduct other outstanding amounts under the same CVR number in a refund amount.
In DMR (the Digital Motor Register) it is possible to see what is charged and refunded on a given car.
How to use DMR:
- Search vehicle
- Enter the car's registration number or vehicle identification number
- Select the tab "Fees" - here you will find information on invoices/refunds and periods
- Double-click on an amount under the AMOUNT column to see more details
If you have questions about your green tax or vehicle excise duty, you can contact SKAT on +45 72 22 18 18 on Monday from 9 am – 5 pm, Tuesday to Thursday from 9 am to 4 pm and Friday from 9 am – 2 pm.
We are sorry that we cannot be helpful with the actual contact with SKAT - this is solely due to the fact that SKAT wants to communicate with the user, who is the tax recipient. We are of course happy to help with other payment documentation to SKAT, should this be required.
Need help or advice?
You are of course always welcome to contact NF Fleet's customer service for help, advice, or support on +45 88 44 40 00. Then we will make sure to take good care of you.