Taxation regulations

Registration tax

The calculation of a car’s registration tax is based on the CO2 emission of the car, which in this case affects the technical market value for the car and thereby also the taxation base.

Based on their CO2 emission, cars are divided into three categories:

• Zero-emission cars: 0 g. CO2 emission per km, i.e., electric cars and hydrogen cars.
• Low-emission cars: Below 50 g. CO2 emission per km, i.e., many plug-in hybrid cars.
• Other vehicles: Above 50 g. CO2 emission per km, i.e., some plug-in hybrid cars as well as all hybrid cards, petrol cars, and diesel cars.

These registration rules will apply to cars that are registered on December 18th, 2020, or thereafter. This means that the taxation base for new cars that have been delivered between December 18th, 2020, and June 1st, 2021, which is when DMR has been updated, will be adjusted retrospectively based on the new calculation of the taxes. 

Calculation of the registration tax for passenger cars:

• 25 % of the technical market value of the car up to DKK 65,800.
• 85 % of the technical market value of the car from DKK 65,800 to DKK 204,600.
• 150 % of the technical market value of the car above DKK 204,600.

From June 1^st, 2021, the registration tax for other vehicles will be calculated based on the above method.

From June 1^st, 2021, zero-emission cars are tax exempted if the technical market value of the car is below DKK 488,000. For zero-emission cars above DKK 488,000, the registration tax will be calculated based on the method for passenger cars, but only 40 % of the calculated registration tax will need to be paid. This only applies if the zero-emission car is registered before 2026. Thereafter, the registration tax will be phased out, until it is fully phased out in 2035.

The registration tax of low-emission cars is 50 % of the calculated registration tax (based on the rules for passenger cars) if the car is registered in 2022. This percentage will be increased until and including 2025:

• Registration in 2022: 50 %.
• Registration in 2023: 55 %.
• Registration in 2024: 60 %.
• Registration in 2025: 65 %.
• Registration after 2025: The registration tax will be increased with 3 percent points each year until and including 2030, whereafter it will be increased with 4 percent points each year until 2035, and from that year, it will be at 100 %, i.e., it will be calculated in the same way as other vehicles.

For vans, the registration tax of the first DKK 75,900 is 0 % and for values over DKK 75,900 (incl. VAT), it is 50 %.

For vans with a total weight at over 3 tons, the maximum registration tax is DKK 47,000. This means that vans at over 3 tons often have a lower registration tax than lighter vans above DKK 110,000 plus VAT.

Basic deduction

If registered in 2022, the basic deduction in the registration tax is as follows:

• Zero-emission cars: DKK 167,500.
• Low-emission cars: DKK 48,750 (after CO2 fee).
• Other vehicles: DKK 21,900 (after CO2 fee).
• All vans: DKK 30,300.
• For zero emmision vans, there is an extra basic deduction at DKK 78,750 for zero-emission vans and DKK 48,750 for low-emission vans.

Temporary battery deduction for zero- and low-emission cars

From January 1st, 2022 the battery deduction is up to DKK 1,300 per kWh. This is a temporary battery deduction, which will slowly be phased out until 2025:

• 2022: Up to DKK 1,300 per kWh (however, only up to 45 kWh).
• 2023: Up to DKK 900 per kWh (however, only up to 45 kWh).
• 2024: Up to DKK 500 per kWh (however, only up to 45 kWh).
• 2025 and onwards: Battery deduction is waived.

The above applies to all electric cars and plug-in hybrid cars under 50 g. CO2 emission per km. Thus, there is no battery deduction for hybrid cars that cannot be charged or plug-in hybrids over 50 g. CO2 emission per km, which means that the registration tax is calculated in the same way as for ordinary petrol and diesel cars.

Taxable value – overview:

• An environmental fee and a CO2 fee are added to the taxable value (cf. under Environmental fee and CO2 fee below).

Calculation of the taxation base

The taxation base for a company car is defined by the car’s purchasing price the first two months. From and including month three, the taxation base will align with the market price and therefore become a technical new car price that follows the mandatory recalculation that has taken place since October 3^rd, 2017. The recalculation is done by documenting the vehicle’s technical market value at the latest when the car is three months old. To calculate the technical market value, this market value is discounted back to the car’s first registration date. In this way, the technical new car price (called the technical market value) is deduced.

The taxation base for leased company cars delivered on February 1^st, 2020, or later must be changed when a recalculation of the car’s registration tax occurs.

Until June 30^th, 2021, the taxation base was calculated as 25 % of the technical market value of the car up to DKK 300,000 and 20 % of the value above DKK 300,000. However, this calculation method will be gradually phased out from July 1^st, 2021, and the breaking point at DKK 300,000 will no longer exist from and including 2025. This means that the taxation base for all company cars in all organizations will be changed each year until 2025.

The calculation method will be phased out as such:

• July 1^st – December 31^st, 2021:5 % of the car’s taxation base up to DKK 300,000 and 20.5 % of the remaining value.
• 2022: 24 % of the car’s taxation base up to DKK 300,000 and 21 % of the remaining value.
• 2023:5 % of the car’s taxation base up to DKK 300,000 and 21.5 % of the remaining value.
• 2024: 23 % of the car’s taxation base up to DKK 300,000 and 22 % of the remaining value.
• 2025 and onwards:5 % of the entire taxation base.

Taxation base for contract extensions

When releasing or extending a leasing contract, the taxation base is equal to the taxation base from the beginning of the leasing period. The monthly taxation will continue to be calculated based on the original taxation base. For cars that are 36 months or older, the monthly taxation will be reduced by 25% from the original monthly taxation.

Used company cars

A used car that is more than 3 years old (over 36 months) will in terms of taxation be valued based on the purchasing price including delivery costs and expenses related to fixing and preparation. 

Self-payment

In the case of self-payment, which is when the employee pays part of the leasing expenses, the taxable value of the car is reduced with the paid amount. The reduction can happen either in the employee’s gross and/or net salary. A reduction in the net salary causes an equal reduction in the monthly taxable value.

Taxation of electric vehicle charging stations

From July 1^st, 2021, a company car driver will not be taxed for having an employer-funded charging station installed at the home address. For existing company cars and charging stations from before July 1^st, the charging station can be transferred to the company car driver tax-free and without any fees when the company car driver has been subject to taxation of a company car for at least six months.

However, only the company car can be charged on the employer-funded charging station at the home address. If a private electric or plug-in hybrid car is charged at the company’s charging station free of charge, it is considered a benefit in kind.

CO2 fee

A CO2 fee must be added to the taxable value of all passenger cars and vans.

The level of the CO2 fee for passenger cars in 2021:

• Up to 125 g. CO2 per km: DKK 253 per g. CO2 per km
• 125-160 g. CO2 per km: DKK 506 per g. CO2 per km
• Above 160 g. CO2 per km: DKK 961 per g. CO2 per km

For vans, the CO2 fee is DKK 253 per g. CO2 per km, regardless of the amount of grams of CO2 emitted by the van.

Environmental fee

An environmental fee must also be added to the taxable value. From January 1^st, 2022, the environmental fee is 350 % of the yearly ownership tax and will gradually increase to 700 % in 2025, which applies to all cars regardless of registration date.

Read more about ownership tax below.

Source: The Danish Ministry of Taxation (Skatteministeriet)

For cars with white license plates, the company can subtract VAT. In order obtain the right to the VAT subtraction, the following conditions must be fulfilled:

• At least 10 % of the driving must be business related.
• The leasing agreement must have been made over a period of at least 6 consecutive months.

VAT deduction

The VAT deduction, which we always inform about, is calculated based on the car’s registration tax like the example below.

• The VAT deduction during the first three calendar years: 
  Registration tax x 2 % x 25 %
  (The three years are determined from the car’s first registration date)
• Afterwards, the VAT deduction amounts to: Registration tax x 1 % x 25 %

Example:
A brand new car with a DKK 150,000 registration tax.

The first three calendar years: DKK 150,000 x 2 % x 25 % = DKK 750 (per month)
Afterwards: DKK 150,000 x 1 % x 25 % = DKK 375 (per month)

Read more about registration tax above under "Taxation Rules".

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.

Exclusively business-related driving

For cars with yellow license plates that are exclusively used for business-related driving, the company can deduct the full VAT. This also applies to VAT of a potential deposit, an extraordinary leasing fee, as well as operating costs.

Combined driving

For yellow plated cars that are also used for private driving (i.e., combined driving), the company can deduct 1/3 of the VAT. The full VAT can still be deducted from the operating costs.

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.

An ownership tax must be paid for all vehicles with Danish license plates. If you wish, NF Fleet can administer the payment of the ownership tax for the company’s leased cars. Read more below.

Motor vehicle tax, green ownership tax, and CO2 ownership tax

For vans first registered before March 18^th, 2009, the rules for motor vehicle tax (vægtafgift) that were applicable at the time are still applicable. Passenger cars from before July 1^st, 1997, will also pay motor vehicle tax. Motor vehicle tax is calculated based on the car’s weight, i.e., the heavier the vehicle, the higher the tax.

Vans registered between March 18^th, 2009, and July 1^st, 2021, as well as passenger cars registered between July 1^st, 1997, and July 1^st, 2021, will pay a green ownership tax (grøn ejerafgift). Green ownership tax is calculated based on the car’s fuel consumption (km per liter) if the car is a petrol or diesel car. For electric cars and plug-in hybrid cars, the car’s electricity consumption (Wh) per km is converted into km per liter petrol. I.e., the longer the car drives per liter, the lower the tax.

Cars registered after July 1^st, 2021 will pay a CO2 ownership tax (CO2-ejerafgift) calculated on the basis of a scale based on the car’s CO2 emissions (grams of CO2 per km). The less g. CO2 per km, the lower the tax.

Read more about ownership tax on SKAT.dk here. (in Danish)

If you drive a diesel car, you also need to pay an equalization fee (udligningsafgift) in addition to the motor vehicle tax/green ownership tax/CO2 ownership tax.

Invoicing

When a leased car is registered, NF Fleet is registered as the owner and lessee as the user. The costs of the ownership tax are imposed on the lessee, and SKAT will send the invoice directly to the registered user, i.e., lessee. If the car is re-registered, e.g., if the license plates are stolen, SKAT will send a new invoice to the user.

If you want NF Fleet to manage the administration, please send the invoice for the ownership tax to NF Fleet. Thereafter, we will take care of the payment and will simultaneously enlist the payment to Nets, so that the company as a lessee will not receive other invoices regarding this. The costs of the ownership tax will thereafter be invoiced from NF Fleet to the lessee.

Refunding

If SKAT requires information regarding a refund, SKAT is of the opinion that they will not inform NF Fleet about this, as SKAT will only communicate with the car’s user. This is because the user is the one that pays the ownership tax and receives a potential refund. Please note that SKAT can deduct other claims under the same CVR number in a refund.

In DMR (the Digital MotorRegister), it is possible to see what has been charged and refunded on a given car. How to do it:

• Type in the car’s registration number or vehicle identification number.
• Select tab 5 "Afgifter”.
• Here, you can find information on charges and refunds as well as time periods.
• Double-click on the amount in the column BELØB to see more details.

Contact SKAT

If you have any questions, please contact SKAT on +45 72 22 18 18.

The phone opening hours are: Monday 9am-5pm, Tuesday-Thursday 9am-4pm and Friday 9am-2pm

We apologize for not being able to help you with the contact between you and SKAT – this is not due to reluctance on our behalf, but only because SKAT wishes to communicate with the user who is the receiver of the fee. Naturally, we help with other payment documentations for SKAT, if needed.