What is a company car?
You can automatically register company driving with Acubiz
Track company driving in real-time via integration with Google Maps or manually enter your driving from your phone.
What about company car taxation?
Taxation of company cars
If you are offered a company car, you do not have to pay for it yourself, even though you are the one who will be using it.
However, the company car’s taxable value is added to your gross salary, meaning you pay for using the car through your tax collection.
Taxation of company cars is done so that your salary is increased to the benefit you obtain by having the vehicle at your disposal. You, therefore, pay more in tax when you have a company car because the benefit is reflected in your tax.
Taxation in connection with private use
If you are allowed to use the company car for private purposes, it is called a “free car.”
If you drive a free car, you must pay tax on a percentage of the car’s total value. As a starting point, the tax is calculated based on the car’s value but is set from a minimum value of DKK 160,000 – even if the car is worth less.
In addition to the DKK 160,000, you must also pay 25%, plus an environmental supplement that equals 15% of the annual road tax:
- If the car’s value is up to DKK 300,000, you must pay tax on 25% of the value + an environmental supplement.
- If the car’s value exceeds DKK 300,000, you must pay tax on 25% of the first DKK 300,000 and 20% of the remaining value + an environmental supplement.
Here are other things to be aware of:
- If you pay your employer to use the car, you can deduct the gross amount from the amount you must pay in tax.
- If you have a company car available that you can also use for private use (i.e., a “free car”), you are no longer entitled to mileage reimbursement or mileage deduction.
- You can pay for the company car with a fixed monthly or annual amount.
It varies who is responsible for paying for fuel
As a starting point, you are responsible for paying for fuel, but it depends on whether the car is owned solely by the employer or jointly by you both.
If the employer solely owns the car, and you only use it for work, the employer should pay for fuel – either with a fuel card or you make an outlay and get reimbursed later.
If you own the car jointly with your employer, it is up to you to pay for fuel.
Do you want to know more?
If you’re missing an accurate mileage log for company and pool cars, consider an automatic and digital mileage log that ensures accurate calculations.
You are welcome to contact us for advice or information on how we can help your company.
How much does it cost to have a company car?
How is the taxation of a company car calculated?
How is a company car taxed?
Company car rules - who is allowed to drive it?
If you use the car for business purposes, only you are allowed to drive the company car. However, if you have a company car available for private use, other household members are allowed to drive the car. You are not entitled to mileage reimbursement if the company car is available for private use.