I wonder what happens if you're leasing the car? Technically it's not your property, so you can't register it.

I'm sure there's some kind of mechanism to prevent people from driving cars leased in another country, but how does it work?

You're just not allowed to drive that car in the country. The European Union common market and free movement of goods doesn't apply to cars when the tax revenue of governments is at stake. Finland has had a somewhat similar car taxation as Denmark, and here the government breaks EU law at will; when some procedure is ruled illegal by EU courts, the government replaces it with a new wording and the circus starts all over. No official is ever held accountable.

How does police find those who drive a foreign vehicle illegally? Stop a vehicle in foreign plates, ask driver's license; if it is a local national driving, investigate. Police have very much powers in Nordic countries for these cases (they can always stop a car and investigate, there's no American type requirement for a probable cause.)

And of course, there are always people who report suspected tax evaders to the police.

There used to be a sort of a hunt for these cases between Sweden (who has no car sales tax) and Finland. E.g. there was a guy who lived in Haparanda on Swedish side and had a girlfriend in Tornio on the Finnish side, and stayed too many nights at the girlfriend's place. He got a big fine and had to pay back taxes because he should have registered himself as a local resident and imported and registered the car to Finland as well, including paying the car import tax.

I sold my first car to a Norwegian friend. It was a wreck so I sold it for the equivalent of 50 € (this was 1990). The friend then moved back to Oslo. She was asked to pay the equivalent of about 2000 € in car tax to register it in Norway. She gave it for scrap instead, of course.

Leasing is not that expensive in Denmark in comparison to ownership. Also, due to extreme rusting of your car after a few years due to road salt, I find it gives more peace of mind.

If you are a permanent resident, you can't drive a vehicle with foreign number plates. That rules out leasing abroad.

Many people live in Malmö but work in Copenhagen precisely to avoid this restriction.

You can't drive a foreign car if you are a permanent resident in Denmark, I think. People in my workplace used to try what you suggest, but it doesn't work. If police stops you and they discover you are in fact living in Denmark you will get an enormous fine.

Leasing is usually a better deal in this case. You can get a small car for around 1500 kr / month.

What if you work for a foreign company that gave you a company vehicle?

I did the same for about 3 years in UK, and it was fine,even the local police and DVLA confirmed that I'm not braking any laws doing it, even though the law is structured in the same way - if you are a permanent resident you can't drive a foreign vehicle in the UK. Except if you work for a foreign company that gave you a company vehicle to use then yes,you can, and there doesn't seem to be any restriction on it.

As far as I know, what you just described is the only "loophole" in existence, and it is supposed to work in any EU country because of some weird nondiscrimination rule. There was even some ECJ ruling on it, if I remember right.

For example: I know of a Dutch guy who leases a Ferrari through a Belgian company he set up for this, because it would cost him twice as much in the Netherlands. There are also examples of Belgian people driving cars with Luxembourg plates, etc. This is not illegal (though it's obviously a form of tax avoidance)

The Danish tax authority has this mentioned in their FAQ [1]. They claim that this is true but, 1) "it is a requirement that your vehicle is primarily used for business purposes abroad", and 2) you must "apply to be exempt from registration tax".

[1] See the question "Foreign company cars" here: https://www.skat.dk/SKAT.aspx?oId=2068721

Might just be their interpretation of the law though. It could very well be impossible in Denmark, but if some EU law is making it possible, local law can't block it (even though they might want it to). And even if local law is blocking it, it might be in violation of EU law.

Given we're talking a €100-120K tax difference on expensive cars, you can always consult a Danish tax lawyer and if he thinks it's doable do it anyway. If the tax authority has a problem with it then, then you just take it to court. Seems worth investigating.