When your business registers a van with yellow number plates, you do not have to pay vehicle registration tax or VAT.

Your yellow plate van must visibly display the name and CVR number of your business on its side.

It must be fitted for transport of goods or tools, for example, and not exceed the maximum total weight of 4 tons.

If you or one of your employees use the vehicle for private purposes, you need to report it to the Danish Motor Vehicle Agency (Motorstyrelsen) in order to be charged tax according to the rules on company cars.

  • VAT may not be have been deducted when vehicle was purchased
  • Private use tax must have been paid (the vehicle must have ‘papegøjeplader' (parrot plates) or stickers for yellow plate vehicles.

Examples of private use

It is considered private use if you or one of your employees use the vehicle for purposes such as:

  • Driving to and from leisure activities
  • Shopping for private purposes
  • Driving children to and from day care
  • Transporting private objects such as furniture, caravan or garden waste

Non-private use

It is not considered private use when you or your employees:

  • Use the vehicle to go for food or collect food during working hours
  • Take the vehicle home from work up to 25 times a year when the vehicle will be used for business purposes the following day, going to a meeting or a course, for example, or if you drive the vehicle to work the day after it has been used for business purposes. Please note that if you use the vehicle to and from an event, course, meeting, etc., it is considered two trips.
  • Collect or drop a colleague in connection with driving between home and work. However, it is a condition that the employer has requested that the vehicle is used for this purpose.

Particular rules apply if the vehicle has been specially designed and if the business is run from different workplaces or involves on-call duty.

You may use the company van between home and the workplaces without the employer risking having the VAT deduction revoked or having to pay tax on private use of the vehicle.

You do not have to pay tax on a company car, but as employer, you need to tick off field 11 in E-income so that your employees are not entitled to deduction for transport between home and work.

The following conditions must be met:

  • The vehicle holds relevant tools, alternatively, you and your employee store tools at home.
  • It must be possible to fully depreciate the value of the vehicle according to the tax regulations.
  • The vehicle may not be used for private purposes.
  • You may drive an unlimited number of kilometers between workplaces and the permanent business address.
  • Occasionally, you may drive between home and the business address, to collect tools, time sheets and sketches/drawings, for example.

If the business has on-call duty

You may drive the van between home and the permanent address of the business without risking having the VAT deduction revoked or having to pay tax on private use of the vehicle.

You are not taxed on a company car.

If you use the vehicle it is a requirement that:

  • The trip is necessary to the business.
  • The employee has clearly been told not to use the vehicle for private purposes
  • The van is packed with tools and other items required to do the job in question.
  • There is an on-call schedule and a requirement to write up a report for each time you are called on duty.
  • You are able to document that the vehicle has been used for the individual duties.
  • The number of vehicles reasonably matches the scope of the on-call schedule.
  • The employee on call is actually on duty for the entire shift.

It will have consequences for you and your employees if you do not observe the rules. Such consequences could be that:

  • You will be asked to pay an amount corresponding to the VAT deduction you were granted when you bought the vehicle.
  • You will be charged tax for private use of the vehicle.
  • You may be charged tax as on a company car for the number of the years that your business has owned the car.
  • You may be fined for not observing the tax regulations.

Please see our legal guide (in Danish) for further legal information.