Do I have to pay tax on income from renting out my leasing car?

Tax rules for private car rental

Your car rental income is deductible. You can either use a basic deduction (bundfradrag) for car rental or the so-called accounting deduction (regnskabsmæssigt fradrag).

You decide which deduction model you want to use, but can only apply one of the models to your annual rental income.

1) Basic deduction

In 2024, you have an annual basic deduction of DKK 22,500 (DKK 21,600 in 2024) if you rent an electric or plug-in hybrid car, and a basic deduction of DKK 12,000 (DKK 11,500 in 2024) if you rent a conventional car.*

The basic deduction is per person, so if you, for example, rent out with a spouse, you have a total basic deduction of DKK 45,000 or DKK 24,000, depending on the type of car.

Income in addition to the basic deduction, you also have a deduction of 40%, and first after this deduction the rest of your income is taxed as other personal income.

Read more about the basic deductions here.

2) Accounting deduction

In the accounting deduction, you pay tax on the part of your income that exceeds your expenses related to the rental of your car.

Read more about the accounting deduction here.

VAT

If your rental income exceeds DKK 50,000 annually, you must pay VAT on the income. This applies regardless of which deduction model you use. You can read more about VAT and private car rental here.

Reporting for tax

At the end of the year, you choose the deduction model that suits you best. You cannot use both deduction models at the same time.

When you connect your account at GoMore to the Danish Tax Authorities, you are entitled to an individual tax deductible. Moreover, you do not have to hasle with reporting your rental income yourself.

GoMore is legally obliged to report rental income earned from private car rental to the Danish Tax Authorities. As a private car owner you must therefore connect your GoMore profile to automatic tax reporting. You can connect your profile here.