Registration tax
Registration tax
Specialists in registration taxes with several landmark cases won for the automotive industry
Regardless of the type of vehicle, at Bachmann/Partners we are highly specialized in the field of registration tax, and we have assembled Denmark’s best and strongest team of lawyers and experts to provide you and your company with the best possible advice.
The area is extremely complex, and many individuals and professionals experience difficulties in understanding and correctly applying the applicable rules. Even the Danish Motor Vehicle Agency, the authority in this field, has struggled to interpret and administer the rules in accordance with the law, as demonstrated by several appeal and court cases that Bachmann/Partners has handled in recent years.
The complexity of this area challenges legal certainty, as non-compliance can have significant financial and personal consequences. Today, more than ever, we see that errors made in the registration tax area are being referred for criminal liability assessment to the Danish Tax Agency’s criminal cases unit.
We assist you in dealings with the Danish Motor Vehicle Agency (Motorstyrelsen).
It is crucial that the right strategy is established from the very beginning of your case, and it can therefore have a significant impact on the outcome that we become involved as early as possible to assist you in dealings with the Danish Motor Vehicle Agency (Motorstyrelsen). If a dispute arises, we are among Denmark’s leading specialists in handling appeals and court cases in this area, and we can therefore support your case all the way to the end.
At Bachmann/Partners, we also take an active role in political work in this area. We do this, among other ways, by maintaining ongoing dialogue with the Danish Motor Vehicle Agency (Motorstyrelsen) and by participating in Motorstyrelsen’s Vehicle Contact Committee on behalf of the Danish Bar and Law Society. We are often also involved in discussions when new legislation on registration tax is being developed.
Through our expertise in this area, we aim to help ensure transparency and that the rules are administered correctly and in accordance with the law, so that citizens and businesses are not unfairly penalized for mistakes made in their efforts to comply with the regulations.
Compliance
With our many years of insight into the business operations of the automotive industry, our expertise is broad, enabling us, among other things, to assist with in-house compliance reviews and framework agreements for a wide range of contracts within the automotive sector.
Below, we delve into several areas where we can assist you or your company.
Contact us today for assistance
Criminal cases in the area of registration tax
Criminal cases in the area of registration tax
As mentioned at the outset, more and more cases concerning registration tax are now being referred for criminal assessment. In our experience, it is absolutely crucial that those handling such criminal cases also possess deep expertise in the field of registration tax.
We have specialized in this area, enabling us to see your case through to the very end should you face a subsequent criminal proceeding. You can read more about that here.
Tax settlement and tax refund
Tax settlement
At Bachmann/Partners, we can assist car importers with advice regarding their business.
In connection with the import of vehicles subject to full registration tax, problems that need to be resolved through the administrative appeals system or the courts do not occur very often. However, issues frequently arise in relation to the import of vehicles intended to be registered under proportional tax or under a tax exemption rule in this country.
Collection of full tax on vehicle imports
We handle many different types of cases involving situations where a vehicle is brought into Denmark with the intention of registering it under proportional registration tax, and where the vehicle is stopped en route to its destination in Denmark.
The vehicle is often driven with foreign temporary plates, export plates, Danish fixed test plates, Danish single-use test plates, or completely without plates. Special rules apply to each variant.
When the vehicle is stopped, the tax authorities, in cooperation with the police, may determine that the vehicle is being used in violation of the rules. This then gives rise to a case, in which the Danish Motor Vehicle Agency (Motorstyrelsen) will often begin by requesting additional information and may subsequently decide to impose full registration tax.
At Bachmann/Partners, we often see in these cases that the authorities overstep when assessing whether a vehicle has been used in violation of the rules, and we are experts in handling these cases to achieve the best possible outcome for our clients.
Collection of full tax for the use of vehicles in the country
When the tax authorities initiate inspections in the form of raids in cooperation with the police, they specifically look for certain types of vehicles. This particularly applies to vehicles registered under a rule for tax reduction or tax exemption, such as crew vans and commercial vans.
We therefore continuously handle cases where the Danish Motor Vehicle Agency, prompted by these inspections, requests additional information from owners of such vehicles or issues a proposal or decision to collect full registration tax, because it believes the vehicle has been used in violation of the rules.
In our view, the area concerning the use of crew vehicles has developed in such a way that crew vehicles today are virtually unusable for the businesses they were intended for.
You can read more about this in our article here, where we delve deeper into the latest practices in the area.
Cases involving the collection of full tax also often concern foreign-registered vehicles, such as foreign company cars used in Denmark by a person with ties to Denmark but who lives and primarily resides abroad. Special residence and stay requirements apply in these cases. At Bachmann/Partners, we have handled several such cases with highly favorable outcomes for our clients.
Self-reporting scheme in relation to import
Over time, we have gained extensive and in-depth knowledge of the self-reporting scheme and are familiar with terms such as monthly declarations, security deposits, settlement periods, and more.
We have in-depth knowledge of the requirements for becoming registered as a self-reporter and can help your company comply with them.
In addition, we are familiar with the challenges that self-reporters face with the Danish Motor Vehicle Agency, particularly regarding valuation and, for example, the use of external tax calculators.
At Bachmann/Partners, we have extensive experience in handling and advising on the issues that can arise when your company faces the Danish Motor Vehicle Agency and disagrees with their calculation of registration tax. Our experts are familiar with the procedures and can provide you with the best possible guidance, helping to clarify whether it is you or the Motor Vehicle Agency that has calculated the tax incorrectly.
As a general principle, we believe that as a self-reporter, you are best placed to handle most cases concerning the specific value of a vehicle, while we take care of the more overarching and sometimes fundamental issues, such as the use of level lists, rules for mileage adjustments, and additions or deductions in the valuation.
However, we are happy to take a critical view of the Motor Vehicle Agency’s approach to valuation, which you can read more about here.
Tax refund
When exporting vehicles, the remaining tax on the vehicles is refunded, after which an export refund is paid out. This often gives rise to numerous disputes, as the Motor Vehicle Agency’s administration in this area has been opaque and inconsistent for many years.
The Motor Vehicle Agency’s unauthorized claims regarding vehicle exports
Under the Registration Tax Act, there are two fundamental conditions for obtaining an export refund: namely, that the vehicle has been deregistered and that the vehicle has been exported from the country.
While the requirement for vehicle deregistration has not caused significant disputes, there have been considerable disputes regarding whether a vehicle can be considered exported from the country. We have handled and are currently handling a large number of cases concerning vehicle export refunds.
For example, on July 8, 2022, Bachmann/Partners won a landmark case on registration tax refunds in the Eastern High Court (Østre Landsret). In the case, the Motor Vehicle Agency had refused to pay the export refund, as they believed there was no documentation that the vehicles had been exported at the time of the application. The Eastern High Court did not support the Ministry of Taxation’s position that the right to an export refund is lost if documentation for the export is only available after the dealer has approved the monthly declaration for the month in which the refund is applied for. This case led to a series of reopenings and is yet another example that the Motor Vehicle Agency cannot administer the rules on registration tax by creating its own rules, but must ensure there is explicit legal authority. You can read more about the case here.
It is our view that significant uncertainty remains regarding what documentation requirements authorities can legitimately impose in relation to exports. This is particularly the case because the National Tax Tribunal’s (Landsskatteretten) practice in the area is inconsistent.
As an example, the National Tax Tribunal has, in its reasoning, established various requirements for those applying for an export refund:
- Document how the vehicle has actually been exported.Dokumentere hvordan køretøjet faktisk er udført
- In some situations, it is positively relevant to the assessment of whether the vehicle can be considered documented as exported that Danish temporary plates were issued at the time of export, as this supports the vehicle’s export.
- In other situations, it is negatively relevant to the assessment of whether the vehicle can be considered documented as exported that Danish temporary plates were issued at export, as this casts doubt on the vehicle’s export.
- It may also be relevant that the applicant for the export refund has ensured, contractually, that the vehicle will be exported and the right to the export refund.
- A sales invoice can alone serve as documentation for export from the country if it contains objective information about the export, such as the date of export, carrier, mode of transport, or similar.
- The Motor Vehicle Agency’s own sworn statement may be given decisive or no weight at all.
…and we could continue to find many more examples.
Despite the significant uncertainty that still exists in this area, at Bachmann/Partners, based on our many years of experience, we can advise you on how to best meet the documentation requirements, whether your company exports vehicles to the EU or to countries outside the EU/EEA.
The Motor Vehicle Agency’s other refusals of export refunds
On behalf of various car dealers, Bachmann/Partners has handled cases against the Motor Vehicle Agency where the Agency has refused access to export refunds for various reasons, including:
- That the requirements of the VAT Act were not met.
- That the vehicles were not sold before the application for registration tax refund.
- That no documentation was provided for payment of the vehicles.
- That ownership of the vehicles was not sufficiently documented.
- That no photographic documentation of the vehicles with temporary plates was provided.
- That no photo ID of the foreign buyer was provided.
You can read more about our position and approach here. We simply want to highlight the importance for the automotive industry of ensuring that the documentation available for vehicle exports is sufficient.
Errors in the Motor Register
We are currently handling a number of cases where vehicle exporters are denied payment of export refunds on the grounds that the vehicle has not been fully settled for tax.
This can occur, for example, in situations where the vehicle was previously used in Denmark under a tax exemption or proportional tax rule and is subsequently registered under full tax.
In this context, the Motor Vehicle Agency does not collect the full tax and only discovers this when an export refund is requested for the vehicle. Despite it being explicitly stated in Section 19 of the Registration Tax Act that a vehicle cannot be registered or re-registered in the Vehicle Register before the registration tax is paid, it has in these situations still been possible, for example, for a vehicle inspection center to issue license plates for the vehicle. This is due to errors in the Motor Register, where the vehicle appears to be fully settled for tax. Since the vehicle also has or has had valid license plates, users of the Motor Register have no reason to believe that the registration tax has not been fully paid.
The question we raise on behalf of our clients in these cases is who should bear the loss when citizens and companies rely on the information in the authorities’ own systems.
At the same time, we are critical of the fact that the only way taxpayers today can ensure that the vehicles they purchase are properly taxed is by requesting access to the Motor Vehicle Agency’s recorded payments relating to the vehicle.
Registration Tax – Our advisory services include:
- Valuation – self-reporting
- How to ensure that the Danish Tax Agency (SKAT) does not subsequently override a self-reported valuation
- Demonstration vehicles
- Parallel imports
- Questions regarding transfer of profits
- Handling fees
- Valuation tasks
- Liability and joint liability for registration tax
- Ownership taxes
- Parking fines
- Automatic speeding fines
- § 20 of the Registration Tax Act
- Recalculation of registration tax
Export refunds
- Calculation of registration tax for used cars in the Danish Tax Agency’s (SKAT) systems today
- Customs inspection
- Financial and operational leasing
- Proportional registration tax
- Taxable value for company cars
- Partial leasing – pitfalls in offering partial leasing
Criminal matters
- Fine negotiations with SKAT
- Defense in tax-related criminal cases concerning VAT and duties
Thematically, our advisory and tax cases typically cover the following areas:
- VAT treatment on purchases
- Invoice requirements for purchases
- VAT on refurbishment of used cars
- VAT treatment on sales
- When to apply standard VAT rules/used goods VAT rules for resale
- When a used car can be sold VAT-free
- When VAT must be paid on the full sales price, including registration tax
- Invoice requirements for sales
- Used goods VAT
- How VAT is calculated if the car is purchased in Denmark, the EU, or a third country
- Test driving used cars: How it affects VAT and registration tax
- Access to VAT deduction for companies/municipalities
- §n 30 of the VAT Act for leasing companies and driving schools
- Assessment of existing leasing contracts
- Drafting of leasing contracts
Need advice on registration tax?
Bachmann/Partners has some of Denmark’s leading experts in their field, making us well-qualified to guide you safely through complex processes related to registration tax. Our specialists can lead you confidently through the process, ensuring that the outcome meets your expectations.
Contact us today for a non-binding meeting about your case.
Contact us today for a non-binding meeting about your case.
Regardless of your situation, we can help you create the most advantageous solution. We have Denmark’s best
team of lawyers and experts, so you can be confident you are receiving the best advice.
We have offices in Copenhagen, Aarhus, and Aalborg, so you always have access to tax advice near you.
Contact us today
- +45 33 23 90 90
- kontakt@bachmann-partners.dk
Or fill out the form to learn more about how we can help you or to book a meeting with us.