Through specialised legal advice, our lawyers can provide you with an overview of the complicated rules in the area of indirect taxes – also from an international perspective.
Tax
VAT, customs duties and other indirect taxes are issues which most companies handle on a daily basis and which often make up a sizeable item in the financial statements. It is important to comply with the applicable rules, without cheating yourself or your customers or business partners. Rules in this area are frequently changed, which does not make it any easier to overcome the challenges. In-depth knowledge of EU law and other legal areas is thus required.
We can give you the necessary insight and go through the indirect taxes affecting you with a view to optimisation and minimisation of the risk of mistakes. If you have received a claim from the Danish tax authorities for payment of customs duties, VAT or other indirect taxes, we are ready to handle the dialogue with the tax authorities and defend your case before the courts.
We are also available for legal advice on VAT, customs duties and direct tax.
Indirect taxes
We offer thorough legal advice to our clients on all aspects of indirect taxes, including advice on:
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Amounts and periods
- Tax liability (registration), including different forms of registration, notification and revocation of registration
- Provision of financial security
- Exemption and refunding of registration fees
For more information on the types of indirect taxes covered by our legal services, please click here.
Excise duties are payable on packaging, beverages, ice cream, chocolate and various other goods. Some excise duties are also known as environmental and energy taxes, e.g. excise duties on electricity and oil. Your company must report excise duties if it manufactures goods in Denmark or buys excisable goods abroad.
Excise duties on tobacco are payable for cigarettes, smoking tobacco, cigars, cheroots and cigarillos. We can advise you on rates and how to calculate such duties.
Some goods are subject to harmonised excise duty rates in the EU. A number of rules apply to this type of goods, governing matters such as excise duty liability, dispatch and receipt of goods, accompanying documents, fallback procedures, etc. We can provide competent and easy-to-understand advice on all of the above to ensure compliance in connection with the shipping of excisable and non-excisable goods.
Suspension procedure
The suspension procedure is a common European procedure which applies to the dispatch of non-excisable goods. Under this procedure, all companies in the EU which manufacture, process, store or trade in harmonised excisable goods may do so without having to pay excise duties until the goods in question are ready for consumption. If you are uncertain of whether your goods are eligible for this procedure, please contact us.
Vehicle registration fees
When you register a vehicle with the public authorities, you must pay a registration fee. Except for hydrogen cars, a registration fee is payable for all vehicle types, also vehicles imported from abroad. If you buy a new car in Denmark, the dealer will usually pay the registration fee and provide the vehicle with number plates. The amount of the fee depends on the vehicle in question.
At DLA Piper, we have lawyers who can advise you on all the different aspects of the payment of registration fees such as:
- Rates
- Deductions and surcharges
- Reduced registration fee
- Registration fee for foreign vehicles
- Transfer of profit
Registration fee for foreign vehicles
In general, it is not legal for a person residing in Denmark to drive a vehicle unless a Danish registration fee has been paid for the vehicle. However, there are some exceptions to this general rule. It is therefore important to be able to provide documentation showing that you are using the foreign vehicle legally if you are pulled over by the police. We can advise you on when you may legally drive a foreign vehicle without paying Danish registration fee.
Leasing
Leasing is becoming increasingly popular, and in recent years there has been a significant increase in the leasing of everything from cars and motorcycles to boats, industrial machines and many other things.
However, the leasing market is quite a jungle. Today, a myriad of leasing types are available, each with their own pros and cons, opportunities and limitations.
Before venturing into the leasing market, it is therefore a good idea to familiarise yourself with some of the leasing types to identify the one that best matches your requirements. The reason is that any gaps in the lease or any provisions with adverse consequences may have a large impact on you.
Below follows a description of the most common leasing types, based on the leasing of cars. You may have come across these types under different names since the various leasing providers use different names to market their solutions.
As indicated by the name, it covers leasing to private individuals. A private lease on a car is typically relatively long-term, e.g. two to four years. In addition to the lump sum payment, which is non-refundable, a private lease contains conditions which may vary from one provider to the next. The conditions govern the parties' agreement on matters such as:
- Lease term
- Mileage during lease term (e.g. kilometres per year)
- Maintenance/service agreement
- Termination notice
Commercial leasing means that the car is leased for commercial purposes. The employer pays all expenses for the vehicle. If the employee wishes to use the vehicle for private purposes, it is important to note that this will trigger taxation (fully expensed car). Overall, there are two different types of commercial leasing: operational leasing and financial leasing. The two types are described below.
What does operational leasing mean?
Operational leasing is a type of commercial leasing. If a business chooses to lease a vehicle under an operational lease, it will not be required to buy the vehicle on the expiry of the lease. For accounting purposes, a vehicle leased under an operational lease is recognised as an operating expense in the income statement.
What does financial leasing mean?
As opposed to operational leasing, financial leasing means that the company undertakes to buy or procure a buyer for the vehicle on expiry of the lease. As a result, the vehicle is actually purchased and not leased, and the purchase price is paid in instalments. For accounting purposes, a vehicle leased under a financial lease is recognised as an asset in the financial statements.
Flexi-leasing is typically aimed at private customers, but differs from private leasing by having a shorter lease term, typically six to 36 months. This type of leasing is normally used for relatively expensive cars with a large vehicle registration fee. This is because, with flexi-leasing, the full registration fee is not payable as a lump sum, but is divided into instalments over the lease term. Moreover, there are also other advantages to flexi-leasing:
- Possibility of more frequent car changes and often also a greater choice of cars.
- Since there is no registration fee, the loss of car value is lower ...
- ... and it is easier to sell the car afterwards.
- You have a greater say over the provisions of the agreement, such as mileage limitation.
But there are also some drawbacks to flexi-leasing that you should take into account. For example, after a flexi-lease term, you are usually required to buy or procure a buyer for the vehicle. This may potentially result in a substantial loss if you are unable to sell the vehicle at the anticipated price.
At the same time, it may be difficult to calculate the price properly if you take out a flexi-lease on a special vehicle which is not very common. This may make it difficult to find a buyer for the vehicle if you do not want to buy it yourself. And, finally, you will usually be responsible for maintenance and repairs yourself. Such expenses are usually covered by a normal private lease.
Break leasing is a variant of ordinary private leasing, with the same contract type. The "break" lies in the division of your lease payments. The division means that the lease payments are large during the first part of the lease term, and then the payments decrease during the last part of the term. The "break" is intended to motivate you to keep the vehicle for the duration of the lease term instead of terminating the agreement early.
A split lease is a lease on a vehicle which is split between company and private use. The expenses involved are also split the same way. A split lease is usually a commercial lease, and if you or your company are considering this option, we most definitely recommend that you contact a legal advisor as your consumer rights are minimal under such lease.
When you or your company are looking to enter into a lease, it is a very good idea to join forces with an expert in this field who not only knows the pros and cons of the various types of leases, but is also up to date on legislation. At DLA Piper, we have cooperated with a large number of major players in the leasing industry, and it has provided us with the insight and experience required to find solutions in all imaginable situations.
Our experienced lawyers, who are specialists in this field, offer advice across the full leasing palette. We also advise on the Danish self-declaration scheme.
Sale and purchase of vehicles
If you are looking to buy or sell a vehicle, we can advise you through the entire process. We can help you draft the contract documents, thus eliminating any mistakes.
Exporting your vehicle
All passenger vehicles, delivery vans, camper vans and motorcycles up to 3,500 kg can be exported and are eligible for export refunds of registration fees. You can ask the Danish tax authorities to prepare a valuation for you by logging onto the motor vehicle register.
