Get an overview of the current VAT rules for both white plated cars, yellow plated cars, and combined driving.
VAT rules for white plated cars
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 here.
VAT rules for yellow plated cars
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
For information or elaboration about VAT on the invoice, incl. VAT in terms of extraordinary leasing expenses, please contact ALD Automotive’s accounting department on +45 33 55 80 00.