Taxation and recalculation of company cars
The value of a company car affects the amount of tax an employee pays on the company car benefit. You are taxed on a company car benefit if your agreement allows you to use the vehicle outside working hours.
The value of a car may change during the first three months after registration. As a result, the taxable value on which the car benefit was originally calculated may also change following the vehicle's recalculation, which takes place three months after the date of first registration in accordance with the Danish Motor Agency's rules on the recalculation of taxable values. However, the taxable value cannot decrease after the date of first registration. The taxable value can only be reduced after 36 months from the date of first registration.
A recalculation is based on the vehicle's current market value after its initial period on the road. The purpose is to ensure that taxation is based on a realistic valuation and reflects the vehicle's value at the time it is used as a company car.
New and used company cars
Recalculation only applies to brand-new company cars.
Market value
During the recalculation process, the vehicle's market value is determined based on the price at which the car could reasonably be sold on the open market.
Taxable value
The value established three months after the date of first registration becomes the new taxable value used for calculating the employee's company car benefit.
How does recalculation affect taxation?
The taxable value cannot be reduced below the value that was established on the vehicle's date of first registration. If the recalculated value is lower, the original taxable value remains unchanged.
If the vehicle's market value has increased after three months, the taxable value will be adjusted upwards to reflect the vehicle's new value.
The purpose of the recalculation is to ensure that taxation is based on the vehicle's actual market value, providing a fair and accurate basis for the taxation of the company car benefit.
Recalculation is required when:
The vehicle is brand-new and has been registered for three months.
Recalculation is not required when:
The vehicle is used. This means that if you re-lease a vehicle, you will not experience a change to the taxable value after three months.
Thirty-six months after the date of first registration, the taxable value is reduced by 25%.
Facts:
Recalculation only applies to new company cars.
It is carried out three months after the vehicle's first registration date.
The taxable value can only increase or remain unchanged (if the vehicle's value has decreased).
The leasing company is responsible for ensuring that the recalculation is carried out.
The recalculation is performed in accordance with the Danish Motor Agency's rules on the recalculation of taxable values.