Obtaining the accounting deduction
If you choose to use the accounting deduction, you must deduct the expenses related to the total rental income before entering it in your preliminary income assessment or your tax assessment notice. You can only deduct the rental expenses, which means that you cannot deduct expenses related to your own use of the car, boat or caravan.
If you use the accounting deduction, it applies to your total income from renting out your car, boat or caravan. In other words, you cannot use the accounting deduction for income from renting out your car and then use the standard deduction for income from renting out your boat.
Keep accounts and a mileage log
You must keep accounts and save receipts for all your expenses during the income year as well as keep a mileage log. That will be your documentation proving that you are entitled to the deduction. You have to submit your accounts, if we ask for them.
You must use the mileage log to calculate which part of the expense the rental activity concerns.
In the mileage log, you register the mileage:
- at the beginning and the income
- before and after each rental activity
- at end of the income year
Get a mileage log template here (Danish only)
Deductions for operating and maintenance expenses
You are entitled to deduct the part of your operating and maintenance expenses for your car relating to the rental activity. You calculate the proportionate expenses which the rental activity represents of the total annual mileage.
This means that if the rental activity only makes up 10% of your total annual mileage, you are only entitled to deduct 10% of your expenses for ongoing maintenance, tires, green vehicle tax, insurance, etc.
You cannot deduct expenses for petrol as the person renting normally pays for petrol.
Deduction for expected annual loss of value
You may deduct a proportionate part of the expected annual loss of value of your car, boat or caravan. You calculate the proportionate expenses which the rental activity represents of the total mileage.
The rules of the Danish Act on Amortisation and Depreciation (Afskrivningsloven) do not apply - it is only possible to apply these rules if you run a business.
No deduction for loss
You cannot get a deduction for any loss you may have. This means that if your annual expenses exceed your annual income, you should not enter anything in your tax assessment notice.